If the spot exchange rate of Mexican pesos for U.S.dollars is MXN9.8=USD1 and the peso is trading at a forward premium of 3%,then you 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.
Correct Answer:
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