Question
Assume that the current U.S. dollar spot exchange rates for the British Pound (BP) and Mexican Peso (MP) currencies are $1.2208/BP and $0.0510/MP, respectively. Also,
Assume that the current U.S. dollar spot exchange rates for the British Pound (BP) and Mexican Peso (MP) currencies are $1.2208/BP and $0.0510/MP, respectively. Also, the 180-day U.S. and Mexican Libor interest rates are 1.9600% and 7.7500%, respectively.
Compute the 180-day BP/MP forward price (or forward cross rate)?
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Edition
134519574, 9780134521046 , 978-0134519579
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