What is the yield of return of this investment

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Company XYZ issued $200 million of one-year CDs in the U.S. at a rate of 1.8 percent. It invested a part of this money, $100 million, in the purchase of a one-year bond issued by a U.S. firm at an annual rate of 2.8 percent. The remaining $100 million was invested in a one-year Brazilian government bond paying an annual interest rate of 4.8 percent. The exchange rate at the time of the transaction was USD/BRL=2.91. What is the yield of return of this investment after one year, when all operations are closed (i.e., XYZ collected interest and principal from investments and paid out interest and principal to its creditors) if the exchange rate changes to USD/BRL =3.31 ?

Reference no: EM131873150

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