Assume €1 = $1.2762 and $1 = S$1.2522. A new coat costs S$187 in Singapore. How much will the identical coat cost in euros if absolute purchasing power parity exists?

A. €97.23

B. €117.02

C. €119.05

D. €190.5

E. €183.48

Assume $1 is currently equal to £.6211. Also assume the expected inflation rate in the U.K. is 2.6 percent while it is 4.3 percent in the U.S. What is the expected exchange rate four years from now if relative purchasing power parity exists?

A. £.5799

B. £.5822

C. £.6105

D. £.6623

E. £.6644

You are expecting a payment of C$100,000 two years from now. The risk-free rate of return is 3.8 percent in the U.S. and 4.1 percent in Canada. The inflation rate is 2 percent in the U.S. and 3 percent in Canada. Suppose the current exchange rate is C$1 = $.9132. How much will the payment two years from now be worth in U.S.dollars?

A. $91,870

B. $102,414

C. $108,851

D. $88,202

E. $90,775

Suppose the current spot rate for the Norwegian krone is $1 = NKr5.9433. The expected inflation rate in Norway is 3.1 percent and in the U.S. it is 1.7 percent. A risk-free asset in the U.S. is yielding 3.2 percent. What risk-free rateof return should you expect on a Norwegian security?

A. 5.1 percent

B. 4.0 percent

C. 4.4 percent

D. 5.9 percent

E. 4.6 percent

If you could show how you arrived at the answer it would be greatly appreciated.