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Question 2) a. (10 points) Suppose that the South African interest rate is 4% and the U.S. interest rate is 6%. If the expect
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Solution: &tion a ) Gien South Africa nkrelt rate US inkrelt ate = 6 1. = i spet exchangerale,FRent = 6.05Rand perY dolla.y cTT.xpecled-futne spot yak i 6. g5- Tathas lhon 6.0os n spetexchange ale. i F=G.a5R i006, R= 0.04 get So ae C1-04) C6.25 Cl-063 deteymined and As vabe changet at eueny ament in time daending on the denond and Supply of aneny in te market Usg pected Ex

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