Question
The spot exchange rate between the Mexican peso (MXN) and the euro (EUR) is S0(MXN/EUR) = MXN 24.00/EUR. Eurocurrency interest rates are i(EUR) = 2%
The spot exchange rate between the Mexican peso (MXN) and the euro (EUR) is S0(MXN/EUR) = MXN 24.00/EUR. Eurocurrency interest rates are i(EUR) = 2% and i(MXN) = 8% per year. What should be the two-year forward exchange rate F2(MXN/EUR)?
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Investment Science
Authors: David G. Luenberger
2nd Edition
0199740089, 978-0199740086
