Determine appropriate four year forward rate premium

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Assume that the annual U.S. return is expected to be 7% for each of the next 4 years, while the annual interest rate in Mexico is expected to be 20%. Determine the appropriate 4 year forward rate premium or discount on the Mexican peso which could be used to forecast the percentage change in the peso over the next 4 years.

Reference no: EM131089335

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