What does this imply about your business using the forward

Reference no: EM133633419

Question Mexican interest rates are normally substantially higher than U.S. interest rates.

a. What does this imply about the forward premium or discount of the Mexican peso?

b. What does this imply about your business using the forward or futures contracts to hedge your periodic profits in pesos that must be converted into dollars?

c. Do you think you would frequently hedge your exposure to Mexican pesos? Explain your answer.

Reference no: EM133633419

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