The following activity consists of 2 sections, corresponding to the topics ''purchasing power parities'' and exchange rate forecast and transaction exposure.

Mexico: https://www.macrotrends.net/countries/MEX/mexico/inflation-rate-cpi#:~:text=The%20Laspeyres%20formula%20is%20generally,a%202.29%25%20increase%20from%202020.

Canada : https://www.macrotrends.net/countries/CAN/canada/inflation-rate-cpi

Purchasing power parities (PPP):

Investigate the annual inflation of Mexico till 2023, as well as Canada's annual inflation.

Using the above data, determine the PPC and answer the following questions:

1.-Is the CFP complied with? 2.-If the CFP is not met, will the domestic currency have to appreciate or depreciate to achieve the CFP? 3.-Justify your answers

Exchange rate forecast and transaction exposure:

Investigate a company that determines the exchange rate forecast and that has obligations denominated in foreign currency, then answer the following questions:

1.-What exchange rate forecasting method do you use (technical, fundamental, market-based, mixed, etc.)? 

2.-What is the main reason why you use this method? 

3.-How far or close to reality is the forecast of the exchange rate that they determine? 

4.-What is the usefulness for the company of determining the exchange rate forecast? 

5.-Does the company have transaction exposure - that is, do it have obligations denominated in foreign currency? 

6.-If you have exposure through transactions, what hedging strategies does the company use?