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A U.S.-based MNC, invests 15,000,000 Mexican pesos for a one-year period at a nominal interest rate of 15 percent. The spot rate of the peso
A U.S.-based MNC, invests 15,000,000 Mexican pesos for a one-year period at a nominal interest rate of 15 percent. The spot rate of the peso is $.049 at the time of the investment. The spot rate of the peso in one year is $.041.
(1) Has the peso appreciated or depreciated over the 1-year period?
(2) what is the dollar amount of the initial investment?
(3) what is the dollar value of the investment after one year?
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