If annualized interest rates in the U.S. and Brazil are 9% and 13%, respectively, and the spot value of the real was R9.017, then at what 180-day forward rate would interest rate parity hold?
A) R9.346
B) R8.696
C) R9.190
D) R8.850

Name: If annualized interest rates in the U.S. and Brazil are 9% and 13%, respectively, and the spot value of the real was R9.017, then at what 180-day forward rate would interest rate parity hold? A) R9.346 B) R8.696 C) R9.190 D) R8.850
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Quizplus · Accepted Answer

9.017 × 1.065 / 1.045 = 9.190

If Annualized Interest Rates in the U