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Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Brazil at 18%. The spot

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Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Brazil at 18%. The spot rate of the Brazilian real is $.1793 While the one-year forward rate of the real is also $.1793. If a U.S. firm uses covered interest arbitrage. which of the following price adjustments should result? Spot rate of real increases, forward rate of real increases. Spotrate of real decteses, forward rate of reai desteases Spot rate of cexid decresses, fomaid rate of real hcreasel Spot nate of real incressec, foward ate of real decteases. Spot rate of real increavex tonword hase of real remins constant

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