(Answered)-The inflation rates in the U.S. and Mexico are 7%, and 14%, - (2025 Updated Original AI-Free Solution

Question

1. The inflation rates in the U.S. and Mexico are 7%, and 14%, respectively.? If the current spot FX rate of the Mexican Peso (MXN) is $0.1500/MXN, what is your best estimate of the peso's expected future spot FX rate ($/MXN) in 2 years?

   a.	0.1829
   b.	0.1863
   c.	0.1408
   d.	0.1321