The current spot exchange rate is 3.75 BRL per US dollar, the one-year forward rate is 3.95, and the one-year US interest rate is 2%.
a. The implied interest rate offered by the BRL forward contract is 5.3%.
b. The implied interest rate offered by the BRL forward contract is 7.4%.
c. The implied interest rate offered by the BRL forward contract is -5.1%.
d. The implied interest rate cannot be calculated using the information provided.
e. None of the above.