GivenGiven that Diamond Bank expects that the 5 Singapore dollar will depreciate against the U.S. dollar from its spot rate of $0.43 to $0.42 in 45 days. The following interbank lending and borrowing rates are provided:Singapore dollar annualized lending rate for 45 days = 2.2%Singapore dollar annualized borrowing rate for 45 days = 2.5%US dollar annualized lending rate for 45 days = 3.5%US dollar annualized borrowing rate for 45 days = 3.9%The covered interest rate parity can be defined as an arbitrage condition that links the spot exchange rate, the forward exchange rate, and the interest rate in two currencies. The interest rate parity theory is used to predict the future spot rate based on the current spot rate. When the covered interest rate parity is reached, it makes it impossible for the traders to earn profits via arbitrage.The covered interest rate parity is expressed as;(1 + i) = (1 + j) × (F/S)Where:i = interest rate in the foreign countryj = interest rate in the domestic countryF = the forward exchange rateS = the spot exchange rateUsing the covered interest rate parity formula, we have;F/S = [(1 + i)/(1 + j)] ………. (1)Let's assume that 1 US dollar = 2 Singapore dollars and the initial spot rate is $0.43 per Singapore dollar.So, the exchange rate in terms of the US dollar per Singapore dollar is;(1/0.43) = 2.3256 US dollar per Singapore dollarUsing formula (1);F/S = [(1 + 0.022)/(1 + 0.025)]F/S = 0.9947368Using the above value in the above exchange rate formula, we have;F = 0.9947368 × 0.43 × 5F = $2.1586Therefore, the forward rate at which Diamond Bank can obtain dollars by selling Singapore dollars forward is $2.1586 per Singapore dollar. This implies that Diamond Bank expects the Singapore dollar to depreciate against the US dollar by $0.43 − $0.421 = $0.009 per Singapore dollar.