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Julia Foster does not believe that the international Fisher effect ( IFE ) holds. Current one - year interest rates in Mexico are 1 1
Julia Foster does not believe that the international Fisher effect IFE holds. Current oneyear interest rates in Mexico are percent, while oneyear interest rates in the US are percent. Julia Foster converts $ to the Mexican pesos and invests them in Mexico for one year. One year later, she converts Mexican pesos back to dollars. The current spot rate of the Mexican peso is $
If the spot rate of the Mexican peso in one year is $ what is Julia Foster's percentage return from her strategy?
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