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Assume that interest rate parity holds. The U.S. five-year interest rate is 2.5% annualized, and the Mexican five-year interest rate is 4% annualized. Today's spot

Assume that interest rate parity holds. The U.S. five-year interest rate is 2.5% annualized, and the Mexican five-year interest rate is 4% annualized. Today's spot rate of the Mexican peso is $.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?

$.174

$.226

$.164

$.183

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