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The Mexican peso is trading at 1 2 pesos per dollar. If the expected U . S . inflation rate is 4 % while the

The Mexican peso is trading at

12

pesos per dollar. If the expected U

.

.

inflation rate is

4 %

while the expected Mexican inflation rate is

24 %

over the next

year, given

PPP

,

what is the expected exchange rate in one

year?

The expected exchange rate is

enter your response here pesos per dollar.

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