Question: all the answer are correct just show how to work the problems Given the information: Interest rate in US (Rh): Interest rate in Euro zone

Given the information: Interest rate in US (Rh): Interest rate in Euro zone (Rh): Line of credit in US: Line of credit in in Euro zone: The spot rate of EUR, now (SRC): 3,5% 7.5% USD 10.000.000 EUR 8,000,000 $1.25 Suppose your forecast tells you that the spot rate of EUR one year later (SR1) will be $1.20. Then, your recommended investment strategy should earn a net profit of: DEUR 400,000 EUR 25,000 USD 320,000 USD 30,000 Suppose the annual inflation rate in the US is expected to be 2.5 %, while it is expected to be 18.00 % in Mexico. The current spot rate (on 1/1/XO) for the Mexican Peso (MXN) is $0.1000. If the spot rate of MXN turns out to be $0.090 on 1/1/X1, the net cash flow of a US exporter to Mexico will: Act! Increase Decrease Question 15 1/1 pts Suppose the annual inflation rate in the US is expected to be 2.5 %, while it is expected to be 18.00 % in Mexico. The current spot rate (on 1/1/X0) for the Mexican Peso (MXN) is $0.1000. If the spot rate of MXN turns out to be $0.085 on 1/1/X1, the net cash flow of a US importer from Mexico will: Dease rrect! Increase
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