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U.S. Treasury securities yield ih = 4.5% annually, and Mexican peso risk-free securities yield if = 19.1%. Suppose that the spot exchange rate is $0.12/Peso.

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U.S. Treasury securities yield ih = 4.5% annually, and Mexican peso risk-free securities yield if = 19.1%. Suppose that the spot exchange rate is $0.12/Peso. What must be the one-year forward rate if interest rate parity holds. (Hint: Use the exact forward premium formula) Select one: a. $0.120/Peso b. $0.137/Peso C. $0.131/Peso d. 50.105/Peso

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