Question
Assume that interest rate parity holds. The U.S. fiveyear interest rate is0.07 annualized, and the Mexican fiveyear interest rate is0.07 annualized. Today's spot rate of
Assume that interest rate parity holds. The U.S. fiveyear interest rate is0.07 annualized, and the Mexican fiveyear interest rate is0.07 annualized. Today's spot rate of the Mexican peso is $0.17. What is the approximate 10year forecast of the peso's spot rate if the 10year forward rate is used as a forecast?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
