Question $3$

$8\mathrm{.}33$ pts

Suppose that traders in the foreign exchange rate market have the new, uniform expectation that that in $3$ months the exchange rate between $ and Swiss Franc CHF will grow by $10\%.$

If the uncovered interest rate parity holds, and you observe that the current exchange rate E did not change...

It must be that, as exp$(E_{t1})$ grew by $10\%,i-F$ grew as well.

It must be that, as exp$(E_{t1})$ grew by $10\%,i-i^F$ fell.

It must be that, as exp$(E_{i1})$ grew by $10\%,i-1-{?}^F$ stayed constant.

It must be that the forward rate at $3$ months is selling at forward discount