If the interest rate on a U.S.one-year bond is 2%,the interest rate on a Brazilian one-year bond is 8%,and the currency premium on reals (Brazilian currency) is 3%,what is the expected rate of appreciation of the U.S.dollar according to interest-rate parity?
A) -3%
B) 3%
C) 5%
D) 6%
Correct Answer:
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