Improving The Trade Environment Of Brazil Essay
High number of diverse and skilled industrial workforce. Significant decline in import tariffs. Supply from a single point that increased economies of scale. Low ratio of people to automobiles. In developed countries, it is 9/1 versus 2/1. There is potential for significant growth opportunities. Leader in improving the trade environment for all Latin American countries.
Disadvantages Volatility of the Real. Although the country has inflation under control, there is a potential return of hyperinflation. Difficulty in acquiring local labor. Uncertainty of profitability due to aggressive pricing strategy designed to gain market share.
(1+R_F)/(1+R_S ) = 〖E (1+i_F) 〗_ /(E (1+i_S))
(1+R_(Brazil Real))/(1+R_$US ) = (〖E (1+i 〗_Brazil))/(〖E (1+i 〗_US))
(1+R_(Brazil Real))/(1+0.9) = (1+.08)E/(1+.03)E
(1+R_(Brazil Real))/1.09 = (1.08)E/(1.03)E
1.03E +1.03E (R_(Brazil Real)) = 1.1772E
1.03E (R_(Brazil Real)) = .1472E
R_(Brazil Real) = .1429 or…