# Suppose the exchange rate is 10 pesos per dollar and you use $1,000 to purchase a one-year

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## Question:

Suppose the exchange rate is 10 pesos per dollar and you use $1,000 to purchase a one-year Mexican bond that pays 10% interest. Next year, the exchange rate is 11 pesos per dollar. Assuming you convert your funds back to U.S. dollars, how much money will you have in one year?

A. $1,000

B. $1,100

C. $91

D. $0

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## Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart