Question
The one-year risk-free rate in the U.S. is 2.74 percent and the one-year risk-free rate in Mexico is 4.44 percent. The one-year forward rate between
The one-year risk-free rate in the U.S. is 2.74 percent and the one-year risk-free rate in Mexico is 4.44 percent. The one-year forward rate between the Mexican peso and the U.S. dollar is MXN12.24/$. What is the spot exchange rate? Assume interest rate parity holds.
MXN12.438/$
MXN12.037/$
MXN14.877/$
MXN13.907/$
MXN12.236/$
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
