The one-year risk-free rate in the U.S. is 3.380 percent and the one-year risk-free rate in Mexico is 5.32 percent. The one-year forward rate between the Mexican peso and the U.S. dollar is MXN12.288/$. What is the spot exchange rate? Assume interest rate parity holds.

rev: 05_17_2019_QC_CS-168753

Multiple Choice

• MXN13.932/$

• MXN12.288/$

• MXN14.902/$

• MXN12.519/$

• MXN12.062/$