Question: please be detailed PROBLEM 4 (9 POINTS) Assume that you have the following information: Spot Rate: 3.20 BRL/1 CAD Eight-month Forward Exchange Rate: 4.30 BRL

please be detailed please be detailed PROBLEM 4 (9 POINTS) Assume that you have

PROBLEM 4 (9 POINTS) Assume that you have the following information: Spot Rate: 3.20 BRL/1 CAD Eight-month Forward Exchange Rate: 4.30 BRL /1 CAD One-Year CAD Interest Rate: 0.75 % annually One-Year BRL Interest Rate: -0.50 % annually CAD: Canadian Dollar BRL: Brazilian Real Is covered interest arbitrage worthwhile? If so, calculate the profits after eight-months, assuming that you have 10,000 CAD now. What else might you do to maximize profits if the covered interest arbitrage is worthwhile (explain in words)

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