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Bankone issued $200 million worth of oneyear CD liabilities in Brazilian reals at a rate of 6.50 percent. The exchange rate of U.S. dollars for

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Bankone issued $200 million worth of oneyear CD liabilities in Brazilian reals at a rate of 6.50 percent. The exchange rate of U.S. dollars for Brazilian reals at the time of the transaction was $0.305/Br 1. (LG 9-5) a. Is Bankone exposed to an appreciation or depreciation of the U.S. dollar relative to the Brazilian real? b. What will be the percentage cost to Bankone on this CD if the dollar depreciates relative to the Brazilian real such that the exchange rate of U.S. dollars for Brazilian reals is $0.325/Br 1 at the end of the year? c. What will be the percentage cost to Bankone on this CD if the dollar appreciates relative to the Brazilian real such that the exchange rate of U.S. dollars for Brazilian reals is $0.285/Br 1 at the end of the year

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