Question
The one-year risk-free rate in the U.S. is 1.870 percent and the one-year risk-free rate in Mexico is 3.34 percent. The one-year forward rate between
The one-year risk-free rate in the U.S. is 1.870 percent and the one-year risk-free rate in Mexico is 3.34 percent. The one-year forward rate between the Mexican peso and the U.S. dollar is MXN12.171/$. What is the spot exchange rate?
Assume interest rate parity holds. rMultiple Choice
MXN14.838/$
MXN13.868/$
MXN12.171/$
MXN11.998/$
MXN12.347/$
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Public Finance In Canada
Authors: Harvey Rosen, Beverly George Dahlby, Roger Smith, Jean-Francois Wen, Tracy Snoddon
3rd Canadian Edition
0070951659, 978-0070951655
