What does "impossible trinity" mean? Explain how they are important when setting a foreign exchange rate policy. ii. "An option contract which is arranged over the counter provides not only the protection over unexpected foreign exchange rate changes, but also the favourable foreign exchange rate". Do you agree with this statement? Explain. What does foreign exchange pass-through mean? Explain. iii. iv. Name and briefly explain three characteristics of the Euro-currency market. v. During the 2018/19, Australian dollar (AUD) has shown 0.41% average weekly change against Malaysian ringgit (MYR) with a 1.53% standard deviation. A company in Kuala Lumpur is expecting to receive AUD2,000,000 in a week. You are required to estimate the maximum weekly loss (percentage) which the company can face if the AUD value would change against their expectations on 95% confidence (hint use VaR = E(e) Zx and Z95% -1.65) vi. List the factors affecting the interest rate on a syndicate loan. vii. Briefly explain the following terms: a. Marking to market in relation with futures contract. b. A foreign bond. c. Economic exposure. viii. Assume that Australians invest heavily in government and corporate securities of Malaysia. In addition, residents of Malaysia invest heavily in Australia. Approximately Australian dollar (AUD) 30.8 billion worth of investment transactions occur between these two countries each year. The total dollar value of two-way trade transactions per year is about AUD17.5 billion. This information is expected to also hold in the future. Because your firm exports goods to Aust lia, as the international cash manager, you are required to oversee the moments of Australian dollar value against the MYR. Explain how each of the following conditions will affect the value of the AUD, holding other things equal. a) Australian inflation has suddenly increased substantially, while Malaysian inflation remains low. b) Australian interest rates have increased substantially, while Malaysian interest rates remain low. Investors of both countries are attracted to high interest rates. c) The Australian income level decreased substantially, while Malaysian income level has remained unchanged.