What would be the forward premium or discount

Reference no: EM131231206

Covered Interest Arbitrage:

Assume the following information:
¦ Mexican one-year interest rate = 15 percent

¦ U.S. one-year interest rate = 11 percent If interest rate parity exists, what would be the forward premium or discount on the Mexican peso's forward rate? Would covered interest arbitrage be more profitable to U.S. investors than investing at home? Explain.

Reference no: EM131231206

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