Assume that interest rate parity holds. The U.S. five‑year interest rate is 0.08 annualized, and the Mexican five‑year i
Posted: Wed Apr 06, 2022 9:08 am
Assume that interest rate parity holds. The U.S. five‑year
interest rate is 0.08 annualized, and the Mexican five‑year
interest rate is 0.04 annualized. Today’s spot rate of the Mexican
peso is $0.28. What is the approximate 10‑year forecast of the
peso’s spot rate if the 10‑year forward rate is used as a
forecast?
interest rate is 0.08 annualized, and the Mexican five‑year
interest rate is 0.04 annualized. Today’s spot rate of the Mexican
peso is $0.28. What is the approximate 10‑year forecast of the
peso’s spot rate if the 10‑year forward rate is used as a
forecast?