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Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Mexico at 14%. The spot

Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Mexico at 14%. The spot rate of the peso is $0.10.What would most likely happen to the forward rate for Pesos? Answer Peso would trade at discount it would out of the money Peso would trade at premium it would be in the money

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