1) If the spot rate between South Korean Won and Brazilian Real is Won 348.70/Real, and the 6-month interest rates in Brazil and South Korea are 8.25% and 1.25%, respectively, what is the expected future spot rate six months from now?

a) Won 337.24 /Real, Won appreciates against South Korean Won

b) Won 360.55 /Real, Won depreciates against South Korean Won

c) Won 326.15 /Real, Won appreciates against South Korean Won

d) Won 372.81 /Real, Won depreciates against South Korean Won

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2) Studies of the accuracy of paid exchange rate forecasters

a) tend to support the the view that "you get what you pay for"

b) tend to support the view that banks do their best forecasting with the yen.

c) as a group, they do not do a better job of forecasting the exchange rate than the forward rate does.

d) tend to support the view that forecasting is easy, at least with regard to major currencies like the euro and Japanese yen.