1. What is the present value of the following payment stream of 7 years, discounted at 8%. $80 payments at the end of each year for seven years, and one lump sum of $1,000 at the end of year 7.
2. The interest rate in the U.K. is 2%, while the interest rate in the U.S. is 1.5%. The spot rate for the British pound is $1.45. According to the international Fisher effect (IFE), what is new level of the British pound? Please show work