If the Spot Indirect Exchange Rate of Mexican Pesos for U.S.Dollars

question 42

Multiple Choice

If the spot indirect exchange rate of Mexican Pesos for U.S.Dollars is 9.8/1 and the peso is trading at a forward premium of 3%, then a Canadian trader will receive:

• A)more than 9.8 Pesos per Dollar in the future.
• B)less than 9.8 Pesos per Dollar in the future.
• C)9.83 Pesos per Dollar in the future.
• D)10.09 Pesos per Dollar in the future.

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