The one-year risk-free rate in the U.S. is 3.060 percent and the one-year risk-free rate in Mexico is 4.88 percent. The one-year forward rate between the Mexican peso and the U.S. dollar is MXN12.262/$. What is the spot exchange rate? Assume interest rate parity holds.

rev: 05_17_2019_QC_CS-168753

Multiple Choice

• MXN12.049/$

• MXN12.479/$

• MXN14.889/$

• MXN12.262/$

• MXN13.919/$

Answer rating: 100% (QA)

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