Question
1)(5 pts) Assume the spot rate on the BRL:USD is $0.213/1 BRL and the 180 day forward rate on the BRL:USD is $0.202/1 BRL. What
1)(5 pts) Assume the spot rate on the BRL:USD is $0.213/1 BRL and the 180 day forward rate on the BRL:USD is $0.202/1 BRL.
What is the annualized forward discount or premium on the BRL:USD.(State whether your answer is a discount or premium).
______________________________
b) If interest rate parity holds and the one year interest rate on the US dollar is 2.1% per year, what is the one year interest rate on the BRL (per year)?
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
