Question: Please i need answer now 11. Ceteris paribus, an increase in the current account deficit will place pressure on the home currency: (a) upward (b)

Please i need answer now Please i need answer now 11. Ceteris paribus, an increase in the

11. Ceteris paribus, an increase in the current account deficit will place pressure on the home currency: (a) upward (b) downward (c) no (d) upward or downward (depending on the size of the deficit) 12. Other things being equal, a weak pound is normally expected to cause pressure in terms of: (a) increasing unemployment and increasing inflation in the UK (b) increasing unemployment and depressing inflation in the UK (c) depressing unemployment and depressing inflation in the UK (d) depressing unemployment and increasing inflation in the UK 13. Assume the following information: You have $1,000,000 to invest Current spot rate US dollar/pound = $1.70 Ninety day forward rate of pound = $1.67 Three-month deposit rate in Eurodollar = 5% p.a. Three-month deposit rate in Eurosterling = 10%. p.a. Using covered interest arbitrage for a 90 day investment, what will be the amount of US dollars you will have after 90 days? Ignore taxation. (a) $1,043,413 (b) $994,633 (c) $1,050,000 (d) $1,006,911

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