Question: (Problem 2 at EOC) While you were visiting London, you purchased a Jaguar for 27,000, payable in three months. You have enough cash (dollar) at

(Problem 2 at EOC) While you were visiting London, you purchased a Jaguar for 27,000, 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 $1.54/ and the three-month forward exchange rate is $1.35/. In London, the money market interest rate is 1.3% for a three-month investment. There are two alternative ways of paying for your Jaguar. Option 1, if you want to keep the funds (dollar) at your bank in the U.S. bank, and buy 27,000 forward, what is the dollar cost of this option today? (e.g., if your answer is 12,345.68, round to two decimals, and enter it as 12345.67)

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