1. Suppose the spot and three-month forward rates for the yen are ¥79.85 and ¥79.16, respectively. What would you estimate is the difference between the annual inflation rates of the United States and Japan? (Negative amount should be indicated by a minus sign. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
2. A couple has just purchased a home for $386,700.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 5.28% APR with monthly compounding. The mortgage has a term of 30 years. How much interest is paid in the first year? Answer Format: Currency: Round to: 2 decimal places.