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All interest rates are given as p.a. You must a just to the period. Take money and interest rates to four decimals before rounding.

During 1995, the Mexican peso to Us dollar exchange rate changed from Mex$5.33/U.S.$ to Mex$7.46/U.S.$. At the same time, U.S. inflation was approximately 3% in contrast to Mexican inflation of about 49%. (Mex$ is symbol for Mexican peso.)

A) By what percent did the nominal value of the U.S dollar change during 1995?

B) By what percent did the nominal value of the peso change during 1995?

C) By what percent did the real value of the peso change over this period?

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Financial Management, Finance

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