1. 2. 3. 4. 5. 6. 7.

Answers:
1.) if Malaysian interest rate becomes high in comparison to Singapore interest rate, then people starts borrowing more Singapore dollar for which demand for Singapore dollar increases & consequently the price will also increase. In the given case, Spot rate will increase from 5.31 to 6.90.
Therefore Singapore $ is expected to appreciate by = (6.90-5.31)/5.31 = 29.94%.
2.) Nominal interest rate of Japan = 12%
Nominal Interest rate of Australia = 14%
Value of A = (14% *1.14)/1.12 = 14.25%
3.) Exchange rates at Airport
A$/MYR – 0.3756/0.4782
A$/ Singapore$ - 0.7764/0.8613
Implied Singapore$/MYR –...