Suppose that a US interest rate is 4% and the forward premium for the Korean won is 1%. What is the interest rate in the Korean market?

1. Suppose that a US interest rate  is 4% and the forward premium for the Korean won is 1%. What is the interest  rate in the Korean market? (Assume that the US is home)
2. A currency trader observes that in the spot exchange market, one U.S. dollar can be exchanged for 12.55 Mexican pesos or for 5.36 Danish krone. What is the cross-exchange rate between the peso and the krone; that is, how many krones would you receive for every peso exchanged?

Part 1Interest Rate in Korean Market = Interest rate in US + Forward risk premiumInterest rate in US = 4%Forward premium for Korean won = 1%Interest Rate in Korean Market = 4% + 1% = 5% Part 2...