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Suppose the exchange rate is 10 pesos per dollar and you use $1,000 to purchase a one-year Mexican bond that pays 10% interest. Next year,
Suppose the exchange rate is 10 pesos per dollar and you use $1,000 to purchase a one-year Mexican bond that pays 10% interest. Next year, the exchange rate is 11 pesos per dollar. Assuming you convert your funds back to U.S. dollars, how much money will you have in one year?
A) $1,000
B) $1,100
C) $91
D) $0
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