assuming japan to be the home country, suppose you have the following data: Japanese interst rate=1% p.a., Brazilian interest rate = 10% p.a. Spot rate=0.025BRL/Yen, 1 year forward rate=0.026BRL/yen...

assuming japan to be the home country, suppose you have the following data: Japanese interst rate=1% p.a., Brazilian interest rate = 10% p.a.

Spot rate=0.025BRL/Yen,  1 year forward rate=0.026BRL/yen

1). Compute the annualized forward premium/discount on Yen

b). Compute the annual interest rate differential between countries

c). is tere a possibilit for earning risk-free profit? if soc compute the profit if you have an equivalent of 100 million Yen at your disposal.

d). what is such a profit called?

e). at what forward rate, the profit making arrangement will lose its lucrativeness?