You are the CEO of a Mexican company that took out a dollar-denominate loan from an American bank one year ago when the peso-dollar exchange rate was 10 pesos per dollar. You borrowed $100,000 at 8% interest and promised to repay the entire balance and interest in one payment at the end of the year.the current exchange rate is 9.5 pesos per dollar .what effective pesos- denominated rate of interest did you pay for the loan.

You are the CEO of a Mexican company that took out a dollar-denominate loan from an American bank one year ago when the peso-dollar exchange rate was 10 pesos per dollar. You borrowed $100,000 at 8% interest and promised to repay the entire balance and interest in one payment at the end of the year.the current exchange rate is 9.5 pesos per dollar .what effective pesos- denominated rate of interest did you pay for the loan.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter21: Risk Management

Section: Chapter Questions

Problem 3P

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