The Current Indirect Exchange Rate Is 12 Pesos Per Dollar

question 85

Multiple Choice

The current indirect exchange rate is 12 pesos per dollar.The anticipated annual inflation rate is 6% in the United States and 14% in Mexico.If the cash inflow in pesos is 50,000 in one year,what are the 50,000 pesos worth in U.S.dollars after conversion from pesos to dollars using the forward exchange rate?

• A)$3,480.78
• B)$3,874.27
• C)$3,882.13
• D)$3,983.78

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