Ask Question
BusinessBusiness
17 January, 09:22

4. The Mexican peso has weakened considerably relative to the dollar, and you are trying to decide whether this is a good time to invest in Mexico. Suppose the current exchange rate of the Mexican peso relative to the U. S. dollar is MXN 9.5/USD. Your investment advisor at Goldman Sachs argues that the peso will lose 15% of its value relative to the dollar over the next year. What is Goldman Sachs's forecast of the exchange rate in 1 year?

+3
Answers (1)
  1. 17 January, 12:39
    0
    The forecast exchange rate in one's year time according to Goldman Sachs is MXN 14.25/USD

    Explanation:

    The fact that the Mexican Peso will lose 15% of its value to the dollar means that a dollar will command 15% of the current Peso value in a year's time.

    Mathematically, MXN 9.5*1.15 = MXN14.25 in a year's time.

    It also implies that a Mexican with dollars wanting to convert into MXN in a year's time will receive more Peso compared to now.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “4. The Mexican peso has weakened considerably relative to the dollar, and you are trying to decide whether this is a good time to invest in ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Justiniano worked in a poultry-packing plant where his job was cutting open chickens and stripping out their visceral organs. after work, he typed for long hours on his computer keyboard, writing a book about his work in the plant.
Answers (1)
Lists job that is dangerous or hard humans to do
Answers (1)
Financial statement note disclosures on long-term liabilities should include information on authorization of new debt issues, sale of previously authorized issues, and retirement and refunding of debt during the year.
Answers (1)
Making an economically rational decision requires Select one: a. considering the prospective benefits and costs to oneself. b. always considering the long-run. c. avoiding opportunity cost. d. equal consideration for your own and others' welfare.
Answers (1)
A website with no spelling mistakes, recent updates, and an author who isn't an expert on the subject is probably okay to use as a source.
Answers (1)
New Questions in Business
Cirrus Aircraft, a leading manufacturer of small airplanes, sees a market opportunity and has decided to double its plant capacity over the next two years. What type of competitive action does this represent? A.
Answers (1)
What is the risk of overusing credit for a business?
Answers (1)
Lorna Perry, who works in a financial firm in Michigan, is required to calculate a large number of clients' accounts daily. She needs to tally figures and check accuracy at a high speed.
Answers (1)
The traits, skills, experience, knowledge, and other features necessary for job success are called internships. job qualifications. job salaries. health benefits.
Answers (1)
hich of the following is consistent with relationship marketing? Maintaining transactional relationships with customers Working with buyers to determine their individual needs Developing market share through mass media advertising Focusing more on
Answers (1)
Home » Business » 4. The Mexican peso has weakened considerably relative to the dollar, and you are trying to decide whether this is a good time to invest in Mexico. Suppose the current exchange rate of the Mexican peso relative to the U. S. dollar is MXN 9.5/USD.
Sign Up Forgot Password?