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hships (L02) Use Table 221 to answer the following questions. a. How many Brazilian reals do you get for your dollar? (Round your answer to 3 decimal places.) b. If the 1 year forward rate on the real is BRL3,558 - USD1, is the real at a forward discount or premium? c. If the 1-year interest rate on dollars is 1.2%, what will be the interest rate on the real? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) d. According to the expectations theory, what is the expected spot rate for the real in 1 years time? (Round your answer to a decimal places) e. According to purchasing power party, what is the difference in the expected rate of price inflation in the United States and the rate in Brazil (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) 3.484 a. BRL Forward discount b. C. $1 Is the real at a forward discount or premium? Interest rate on the real Expected spot rate: 1 USD Difference in expected inflation BRL * 3.558 (0.07% d. e. Country Currency Exchange Rate Europe Eurozone countries Euro (EUR or ) 1.217" Sweden Krona (SEK) 8.561 Switzerland Franc (CHF) .983 United Kingdom Pound (GBP or ) 1.393 Americas Brazil Real (BRL) 3.484 Canada Dollar (CAD) 1.284 Mexico New peso (MXN) 18.846 Asia/Africa 1.322 Dollar (AUD) Australia 6.324 Yuan (CNY) China 7.847 Dollar (HKD) China (Hong Kong) 66.910 India Rupee (INR) 109.430 Yen (JPY or ) Japan 12.433 South Africa Rand (ZAR) 1.081.200 South Korea Won (KRW) * Direct quotes (number of US dollars per unit of foreign currency). Other quotes are indirect (units of foreign cur rency per US dollar Source: The New York Times, April 26, 2018

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