question 3 please

Remaining Time: 39 minutes, 39 seconds. Question Completion Status: IRP suggests that a currency's spot rate will change according to interest rate differentials. QUESTION 3 The inflation rate in the U.S. is 3%, while the inflation rate in China is 5%. The current exchange rate for the Chinese yuan (1) is $0.1400. After supply and demand for the Chinese yuan has adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be: A. SO.1470. B. SO.1427. C. So.1193. D. SO.1400 QUESTION 4 The dollar-euro exchange rate is quoted as $1.20 1.00 and the dollar pound exchange rate is quoted at $1.40 = 1.00. If a bank quotes you a cross rate of 1.00 - 1.2, how much profits can a smart trader make if he has $1,000,000 to invest? A. No arbitrage is possible B. $28,571 C. $20,000