Problem 3 ( 4 points ) 1 . Suppose that the Swedish Krona ( SEK ) is quoted at SEK 8. 621 - 8. 657/$ and the Thai Baht* (THB ) is quoted at $0. 0254 - 95/ THB . What is the direct quotation for the Swedish Krona in Bangkok ? Explain your answer . ( 2 points) 2. How large would transactions costs ( in percentage ) have to be to make triangular arbitrage* between the exchange rates $#` = $1. 542 2/6, SHE = $0. 9251/E. and SEE = $1. 6650/{ profitable ? ( 1 point ) 3 . The U. S. and the country of Rueland have the same real interest rate of 3%/0 . The expected inflation over the next year is 6 percent in the U.S. versus 21 % in Rueland . Interest rate parity exists . The one - year currency futures contract on Rueland's currency ( called the mu ) is priced at $. 40 per mu . What is the spot rate of the mu ? ( 1 point )