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Determining annual interest rate in mexico

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Reference no: EM13144112

The spot rate of exchange, S(MXN/USD), between the Mexican peso (MXN) and U.S. dollar (USD) is MXN 11.95/USD and the 6-month futures rate is MXN 12.4328/USD. If U.S. interest rates are 5% per annum then the annual interest rate in Mexico must be

a. 6.64%

b. 13.28%

c. 17.4%

d. 22.6%

Reference no: EM13144112

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