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The one year risk-free rate in the US is 1.96 percent and the one year risk free rate in Mexico is 3.56 percent. The one
The one year risk-free rate in the US is 1.96 percent and the one year risk free rate in Mexico is 3.56 percent. The one year forward rate between the Mexican peso and the US dollar is MXN12.18/$. What is the spot exchange rate? Assume interest rate parity holds MXN14,8365 MXN1905 MXN13 865 MXN12.18475 MXN12.375/
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