You have $100 to invest for 1 year. You consider investing it in the US market at 2.53% or in the Brazilian market in BRL (Brazilian real) at 6.45%. The USDBRL spot rate is 3.87. Your FX analyst forecasts BRL will depreciate by 20%. If you were to rely on your analyst's prediction and assume no capital controls, which investment would you choose?

What are the risks associated with this trade?

Answer rating: 100% (QA)

To determine which investment would be more favorable lets analyze the options Option 1 Investing in the US market at 253 If you invest 100 in the US ... View the full answer