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Posted on Jul 29, 2024

Suppose threeyear deposit rates on dollars and Mexican pesos are 6% and 15% annually, respectively. If the current spot rate for the USD is 18.23

Suppose threeyear deposit rates on dollars and Mexican pesos are 6% and 15% annually, respectively. If the current spot rate for the USD is 18.23 peso/$, then the spot rate for the USD three years from now implied by these interest rates according to International Fisher Effect is

a. 14.2761 peso/$

b. 20.9645 peso/$

c. 23.2789peso/$

d. 24.2310 peso/$

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