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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 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/$. What is the spot exchange rate? Assume interest rate parity holds.
rev: 05_17_2019_QC_CS-168753
Multiple Choice
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MXN13.932/$
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MXN12.288/$
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MXN14.902/$
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MXN12.519/$
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MXN12.062/$
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