A U S based MNC invests 15 000 000 Mexican pesos for a oneyear period at a nominal interest rate of 15 percent

Question

A U.S.-based MNC, invests 15,000,000 Mexican pesos for a one-year period at a nominal interest rate of 15 percent.

The spot rate of the peso is $.049 at the time of the investment. The spot rate of the peso in one year is $.041.

Finance