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Assume that interest rate parity holds. The U.S. five-year interest rate is 5% annualized, and the Mexican five-year interest rate is 8% annualized. Today's spot

Assume that interest rate parity holds. The U.S. five-year interest rate is 5% annualized, and the Mexican five-year interest rate is 8% annualized. Today's spot rate of the Mexican peso is $0.20. What is the approximate five-year forecast of the peso's spot rate if the five-year forward rate is used as a forecast? Answer $0.1944 $0.1737 $0.2057 $0.2302

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