1. You work on a FX trading desk. A client calls and asks youthe deposit rate you can guarantee them in the Malaysian Ringgit(MYR) currency for one year. You have the below information. Whatdeposit rate can you offer the client as a guarantee you can securethem? Your main funding currency is USD. Answer in percentagepoints to the fourth decimal (e.g. 2.5000% is 2.5000).
USD/MYR Spot: Â Â 4.1090
USD/MYR 1-yr Forward FX: 4.1695
USD 1yr Interest Rate: 2.4400%
2. You are analyzing the returns of an investment fund over thelast 2 years. Returns and inflation during that time are listedbelow in the table. What was the real return during year 1? Answerin percentage points to the nearest 4th decimal.
  Return  Inflation
Year 1 7.20% 3.90%
Year 2 2.10%. 4.20%
