. (6 points) Suppose that you work are the manager of the finance department for the Smith Company. Smiths operations are growing rapidly in Paraguay, and as a result of its growth in Paraguay, Smith now has a large amount of payables in Paraguayan Guarani. You noticed that historically, the forward rate of the Paraguayan Guarani shows a large discount. You have evidence that interest rate parity and purchasing power parity currently hold for the U.S. and Paraguayan economies. Does the consistent discount in the forward rate for the Paraguayan Guarani mean that the forward rate is underpriced (that is, banks should quote a higher forward rate)? Briefly explain.