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Please answer both! Thank you. Suppose that E[p$] = 2% and the expected annual inflation in Mexico (E[pPeso]) is 8.12%. Suppose also that the nominal

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Please answer both! Thank you.

Suppose that E[p$] = 2% and the expected annual inflation in Mexico (E[pPeso]) is 8.12%. Suppose also that the nominal interest rate on a given credit instrument in the U.S. (i$) is 3% compounded annually. What should the annual nominal interest rate on a similar credit instrument in Mexico (iPeso) be if the International Fisher Relation holds? 1.09% 6.12% 9.18% 10.12% O 2% It is assumed that the real interest rates in country d should be greater than the real interest rates in country f for the International Fisher Relation to hold. True False

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