The Spot Exchange Rate for the Mexican Peso Is 0

question 24

Multiple Choice

The spot exchange rate for the Mexican peso is 0.081 CAD/MXN.If the one-year Canadian interest rate is 4.5% and the one-year Mexican interest rate is 7.6%,compute the implied one-year forward rate in CAD/MXN.

• A)0.079 CAD/MXN
• B)0.083 CAD/MXN
• C)0.085 CAD/MXN
• D)0.087 CAD/MXN
• E)0.081 CAD/MXN

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Definitions:

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A complex system of nerves and networks in the brain, controlling basic emotions and drives.

Experiential System

An unconscious, intuitive, and automatic system of thinking.

Cognition

The mental action or process of acquiring knowledge through thought, experience, and the senses.

Cognitive System

A conscious, rational, and controlled system of thinking.