A family in Mexico is planning a vacation to Valley Forge, Pennsylvania, USA six months from now.
Fantastic news! We've Found the answer you've been seeking!
Question:
A family in Mexico is planning a vacation to Valley Forge, Pennsylvania, USA six months from now. The current cost of the tripaccommodations is $2500. However, the dollar cost of the accommodations would be adjusted to any increase in the U.S. cost of living. Specifically,the U.S. inflation is expected to be 2.2% per year, while Mexican inflation is expected to be 4.8% per year.Assuming that PPP holds at every point during the year, what is the expected exchange rate six months from now if the Mexican peso presently tradesat Ps20.00/$?
Posted Date: