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A U.S. investor with $10,000 to invest can buy a one-year Mexican government bond with a nominal interest rate of 1 percent. Suppose that the

A U.S. investor with $10,000 to invest can buy a one-year Mexican government bond with a nominal interest rate of 1 percent. Suppose that the exchange rate at the time of purchase is 10 pesos per dollar. Further suppose that, at the end of the year, the exchange rate changes to 12 pesos per dollar. How much will the investor receive upon redeeming the bond?

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