Description
4.10 Suppose annual inflation
rates in the
a) $.00276
b) $.01190
c) $.00321
d) $.00102
Explanation & Answer
Suppose annual inflation rates in the U.S. and Mexico are expected to be 6% and 80%, respectively, over the next several years. If the current spot rate for the Mexican peso is $.005, then the best estimate of the peso's spot value in 3 years is
Ans : - Option (d) $.00102 is correct.
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