After studying iris Hamson's credit analysis, George Davies is considering whether he can increase the holding period return on Yucatan Resort's excess cash holdings (which are held in pesos) by investing those cash holdings in the Mexican bond market. Although. Davies would be investing in a peso-denominated bond, the investment goal is to achieve the highest holding period retu measured in U.S. dollars, on the investment. Davies finds the higher yield on the Mexican one-year bond, which is considered to be free of credit risk, to be attractive be concerned that depreciation of the peso will reduce the holding period retum, measured in U.S dollars. Hamson has prepared selected economic and financial data to help Davies make the decision. Hamson recommends buying the Mexican one-year bond and hedging the foreign currency exposure using the one-year forward exchange rate She concludes: "This transaction will result in a US dollar halcing perioc retuin that is equal to the holding period retum of the US one-year bond:" a. Calculate the US. dollar holding period return that would result from the transaction recommended by Hamson. Show your calculations. State whether Hamson's conclusion about the U.S. dillar holding period retum resuiting from the transaction is correct or incorrect calculations. State uonar nolding period return that would result from the transaction recommended by Hamson. Show your calculations. State whether Hamson's conclusion about the U.S. dollar holding period return resulting from the transaction is correct o incorrect. After conducting his own analysis of the'U.S. and Mexican economies, Davies expects that both the U.S. inflation rate and the real exchang rate will remain constant over the coming year. Because of favorable political developments in Mexico, however, he expect that the Mexican inflation rate (in annual terms) will fall from 6 percent to 3 percent before the end of the year Ac . result, Davies decides to invest Yucatan Resort's cash holdings in the Mexican one-year bond but not to hedge the currency is are. (Do not round intermediate calculations. Round your answer to 1 decimal place.) b. Calculate the expected exchange rate (pesos per dollar) one year from now. Show your calculations. Note: Your calculations should assume that Davies is correct in his expectations about the real exchange rate and the Mexican and U.S. inflation rates (R.. I your intermediate calculations to 4 decimal places.) c. Caiculate the expected U.S. dollar holding period return on the Mexican oneyear bond. Show your calculations. Note: Your c. Calculate the expected U.S, dollar holding period return on the Mexican oneyear bond. Show your calculations, Note: Your calculations should assume that Davies is correct in his expectations about the real exchange rate and the Mexica US. inflation rates. (Do not round intermediate calculations. Round your answer to 2 decimal pleces.)