6. Why might speculators view the real as being overvalued? Based on the data in the case, what is your best estimate as to the reals degree of overvaluation? 7. What are the tradeoffs that President Cardoso must consider in deciding whether to accelerate the reals depreciation? 8. Could Brazil have avoided the recessionary impacts of its monetary policy if it had devalued the real instead? 9. What would a Brazilian devaluation do to the currencies and economies of Argentina and Chile, its neighbors and largest trading partners? 10. What is the link between Brazils budget deficits and its historical hyperinflation? 11. What mix of fiscal and monetary policy would you recommend to President Cardoso? Should he devalue or defend the real?