(True, False, Uncertain Questions) Read each statement carefully and explain why the statement is either true= false, or uncertain. Marks will be given based on the explanation to the answer, not on the answer itself. The answer to each question must not exceed 5 lines. a) (10 marks) Suppose that the riskfree interest rate if = 3% on your domestic sovereign bond. You are considering to buy a foreign country's sovereign bond, the promised interest of which it : 10%. When the government of the country defaults on its debt, the return on that sovereign bond is if = 5%. The probability of default in the next period is 0.5. Then the maximum expected depreciation rate of the foreign currency which makes CarryTrade protable is 1%. (10 marks) Suppose that the risk-free interest rate if = 3% on your domestic sovereign bond. You are considering to buy a foreign country's sovereign bond: the promised interest of which it : 10%. When the government of the country defaults on its debt, the return on that sovereign bond is if = 5%. The probability of default in the next period is 0.5. Investors are assumed to be riskneutral. The expected depreciation rate of the foreign currency in the next period is 4%