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Your U.S. company has $50,000,000 to be invested for the next 180 days. Using only the data given below, answer the following questions. (a and
Your U.S. company has $50,000,000 to be invested for the next 180 days. Using only the data given below, answer the following questions. (a and b). 0.50% 0.50% U.S. interest rate (annual): Mexico interest rate (annual): Spot rate: 180 day forward rate: 1 Mexican Peso equals 0.05000 U.S. Dollar 1 Mexican Peso equals 0.04950 U.S. Dollar Your forecast of the spot rate In 180 days: 1 Mexican Peso equals 0.05050 U.S. Dollar a.) 15 points In which country would you invest the $50,000,000 if you had the ability to use the forward market? (7.5 points) What total amount (in dollars) would you obtain at the end of 180 days? (7.5 points) Show the necessary calculations. b.) 15 points In which country would you invest the $50,000,000 if you are 100% certain that the forecast will come true? (7.5 points) What total amount (in dollars) would you obtain at the end of 180 days? (7.5 points) Show the necessary calculations
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