Question
If inflation in U.S. is projected at 3% annually for the next year and at 8% annually in Mexico for the same period, and the
If inflation in U.S. is projected at 3% annually for the next year and at 8% annually in Mexico for the same period, and the spot rate is currently at 10.20 pesos/$, then the purchasing power parity implies that the spot rate one year from now is (rounded):
a.Pesos 10.695/$
b.Pesos 10.4512/$
c.Pesos 9.9548/$
d.Pesos 9.7278/$
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
