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QUESTION
The Current Exchange Rate between Brazil and U. is One British Pound Equals 4.5 Brazilian Real. The one year Annual Interest Rate in UK is 1%, while...
The Current Exchange Rate between Brazil and U.K. is One British Pound Equals 4.5 Brazilian Real. The one year Annual Interest Rate in UK is 1%, while the Annual Interest Rate in Brazil is 8% . Given this, what would you expect the Forward Rate to be between Brazilian Real and British Pounds, one year from now? Explain your steps.
