Question: please help with interest rate on the real and difference in expected inflation Problem 22-5 Exchange Rate Relationships (LO2) Use Table_22.1 to answer the following
please help with interest rate on the real and difference in expected inflation
Problem 22-5 Exchange Rate Relationships (LO2) Use Table_22.1 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 BRL3.547 = USD1, is the real at a forward discount or premium? c. If the 1 -year interest rate on dollars is 1%, 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 year's time? (Round your answer to 3 decimal places.) e. According to purchasing power parity, 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.)
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