2 3 Mexican Bonds BANK OF JAPAN Bank of Japan sets benchmark borrowing rates below Investor borrows Investor exchanges yen for Mexican pesos or buys Mexican bonds. Mexican peso- denominated Dec. 2023...

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Extracted text: 2 3 Mexican Bonds BANK OF JAPAN Bank of Japan sets benchmark borrowing rates below Investor borrows Investor exchanges yen for Mexican pesos or buys Mexican bonds. Mexican peso- denominated Dec. 2023 bonds yield The investor collects the higher interest rate and benefits as peso rises against yen. 0.1% Japanese yen at a low interest rate. 6.5% Assume that a Japanese citizen decide to borrow 5000 JPY (Japanese Yen) in order to buy Mexican Bonds when the Mexican Pesos equals 5 Japanese Yen (1 MXN = 5 JPY). At the end of the year if the Mexican Pesos (MXN) would be 7 Japanese Yen (1 MXN = 7 JPY) how many Yen she will get earn?