In what country would you choose to borrow in which would


Suppose the interest rate on 1-year loans in the United States is 2.0% while in Mexico the interest rate is 7.0%. The spot exchange rate is MXN15 = USD1 and the 1-year forward rate is MXN20 = USD1.

a. In what country would you choose to borrow?

USA

Mexico

b. In which would you choose to lend?

USA

Mexico

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Financial Management: In what country would you choose to borrow in which would
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