Show all your work. I can only give you partial credit if you show how you approached the problem! For the time value of money computations show what information you used to calculate the answer. Do not just write down the final answer.

IB431 International Finance 5. Using the table below containing economic, financial, and business indicators from October 20, 2015, issue of The Economist (print edition) to answer problems Gross Domestic Product Industrial Unemployment Forecas Forecas Production Rate Latest Country Qtr 2007e 2008 Recent Qtr Latest Australia 4.3% 3.8% 4.1% 3.5% 4.6% 4.2% Japan 1.6% -1.2% 2.0% 1.9% 4.3% 3.8% United States 1.9% 3.8% 2.0% 2.2% 1.9% 4.7% Otr* Consumer Prices Forecas Interest Rates 1-yr Govt month Bond Country Australia Japan United States Year Ago 4.0% 0.9% 2.1% Latest 2.1% -0.2% 2.8% 2007e 2.4% 0.0% 2.8% Latest 6.90% 0.73% 4.72% Latest 6.23% 1.65% 4.54% Current Units (per US$) Trade Balance Last 12 mos (billion Current Account Last 12 Forecas mos t07 (billion (% of GDP) Oct 17th Country Year Ago Australia -13.0 -$47.0 -5.7% 1.12 1.33 Japan 98.1 $197.5 4.6% 117 119 United States -810.7 -$793.2 -5.6% 1.00 1.00 (1) Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following cross rates: a. Japanese yen/US dollar in 1 year b. Japanese yen Australian dollar in 1 year c. Australian dollar/US dollar in 1 year (2) Assuming International Fisher applies to the coming year, forecast the following future spot exchange rates using the government bond rates for the respective country currencies: a. Japanese yen/US dollar in 1 year b. Japanese yen Australian dollar in 1 year c. Australian dollar/US dollar in 1 year IB431 International Finance (3) Calculate the country's Misery Index (unemployment + inflation) and then use it like interest differentials to forecast the future spot exchange rate, one year into the future. a. Japanese yen/US dollar exchange rate in 1 year b. Japanese yen/Australian dollar exchange rate in 1 year IB431 International Finance 5. Using the table below containing economic, financial, and business indicators from October 20, 2015, issue of The Economist (print edition) to answer problems Gross Domestic Product Industrial Unemployment Forecas Forecas Production Rate Latest Country Qtr 2007e 2008 Recent Qtr Latest Australia 4.3% 3.8% 4.1% 3.5% 4.6% 4.2% Japan 1.6% -1.2% 2.0% 1.9% 4.3% 3.8% United States 1.9% 3.8% 2.0% 2.2% 1.9% 4.7% Otr* Consumer Prices Forecas Interest Rates 1-yr Govt month Bond Country Australia Japan United States Year Ago 4.0% 0.9% 2.1% Latest 2.1% -0.2% 2.8% 2007e 2.4% 0.0% 2.8% Latest 6.90% 0.73% 4.72% Latest 6.23% 1.65% 4.54% Current Units (per US$) Trade Balance Last 12 mos (billion Current Account Last 12 Forecas mos t07 (billion (% of GDP) Oct 17th Country Year Ago Australia -13.0 -$47.0 -5.7% 1.12 1.33 Japan 98.1 $197.5 4.6% 117 119 United States -810.7 -$793.2 -5.6% 1.00 1.00 (1) Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following cross rates: a. Japanese yen/US dollar in 1 year b. Japanese yen Australian dollar in 1 year c. Australian dollar/US dollar in 1 year (2) Assuming International Fisher applies to the coming year, forecast the following future spot exchange rates using the government bond rates for the respective country currencies: a. Japanese yen/US dollar in 1 year b. Japanese yen Australian dollar in 1 year c. Australian dollar/US dollar in 1 year IB431 International Finance (3) Calculate the country's Misery Index (unemployment + inflation) and then use it like interest differentials to forecast the future spot exchange rate, one year into the future. a. Japanese yen/US dollar exchange rate in 1 year b. Japanese yen/Australian dollar exchange rate in 1 year