Problem 14 A late penalty of 20% will apply to new answers. Intro Consider the following information about the U.S. and Brazil: U.S. Brazil Expected inflation rate 2% 3% Nominal interest rate 3.8% 4.4% Spot rate $0.201 per real $0.184 per real 1-year forward rate | Attempt 1/10 for 9 pts. Part 1 What is the expected exchange rate in one year according to purchasing power parity (in dollars per real)? .199 Correct Expected percentage change in the exchange rate (PPP): 1+1h 1 + 0.02 e = - 1 = - 1 = 0.00971 1 + 0.03 1+ If Expected exchange rate: Si = S.(1 + e) = $0.201 / R$ . (1 + 0.00971) = $0.199/R$ = Attempt 1/10 for 8 pts. Part 2 What is the expected exchange rate in one year according to the international Fisher effect (in dollars per real)? 3+ decimals Submit Part 3 | Attempt 1/10 for 8 pts. What should be the one-year forward rate according to interest rate parity (in dollars per real)? 3+ decimals Submit