City Bank issued $200 million of one-year CDs in the United States at a rate of 6.50

Question:

City Bank issued $200 million of one-year CDs in the United States at a rate of 6.50 percent. It invested part of this money, $100 million, in the purchase of a one-year bond issued by a U.S. firm at an annual rate of 7 percent. The remaining $100 million was invested in a one-year Brazilian government bond paying an annual interest rate of 8 percent. The at the time of the transaction was Brazilian real 0.50/$1.

a. What will be the net return on this $200 million investment in bonds if the between the Brazilian real and the U.S. dollar remains the same?

b. What will be the net return on this $200 million investment if the changes to real 0.4167/$1?

c. What will be the net return on this $200 million investment if the changes to real 0.625/$1?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...