Question

16. Suppose annual inflation rates in the U.S. and Mexico are expected to be 8% and...

16. Suppose annual inflation rates in the U.S. and Mexico are expected to be 8% and 60%, respectively. If the current spot rate for the Mexican peso is $.007, then the best estimate of the peso's spot value in 90 days is:

A.

$0.0091

B.

$0.0062

C.

$0.0032

D.

$0.0023

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