Question: (Problem 2 at EOC) While you were visiting London, you purchased a Jaguar for 37,000, payable in three months. You have enough cash (dollar) at

(Problem 2 at EOC) While you were visiting London, you purchased a Jaguar for 37,000, payable in three months. You have enough cash (dollar) at your bank in New York City, which pays 0.35% interest per month, compounding monthly, to pay for the car. Currently, the spot exchange rate is $1.58/ and the three-month forward exchange rate is $1.38/. In London, the money market interest rate is 1.7% for a three-month investment. There are two alternative ways of paying for your Jaguar. a Option 2: Buy a certain pound amount spot today and invest the amount in the U.K. for three months so that the maturity value becomes equal to 37, what is the the dollar cost of this option today? (e.g., if your

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