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Ex 21 Exchange rate (ef) = => St+1 = S0 (1+ef ) = 11(1+0 14) = 12 54 The expected rate is 12 54 pesos per dollar Ex 22 Exchange rate (ef) = => St+1 = S0 (1+ef ) = 0 58(1+0 27)= 0 74 New exchange rate.
Ex 21 Exchange rate (ef) = => St+1 = S0 (1+ef ) = 11(1+0.14) = 12.54 The expected rate is 12.54 pesos per dollar Ex 22 Exchange rate (ef) = => St+1 = S0 (1+ef ) = 0.58(1+0.27)= 0.74 New exchange rate = 0.74 pounds per dollar