1. Suppose Capital One is advertising a 60?-month, 5.79% APR motorcycle loan. If you need to borrow $8,000 to purchase your dream? Harley-Davidson, what will be your monthly? payment? (Note: Be careful not to round any intermediate steps less than six decimal? places.)
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 $1.55. According to the international Fisher effect (IFE), what is new level of the British pound?
3. In China a Big Mac costs Yuan 16 (local currency), while in the US the same Big Mac costs $4.56. The exchange rate between Yuan and US dollar is Yuan6.1341/$. According to purchasing power parity, is Chinese Yuan overvalued or undervalued? Why?