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Grupo Bimbo? (Mexico).?Grupo? Bimbo, headquartered in Mexico?City, is one of the largest bakery companies in the world. OnJanuary? 1st, when the spot exchange rate is Ps10.80/$?, thecompany borrows $25.0 million from a New York bank for one year at6.80% interest? (Mexican banks had quoted 9.60% for an equivalentloan in?pesos). During that? year, U.S. inflation is 2.0% andMexican inflation is 4.0%. At the end of the year the firm repaysthe dollar loan.a. If Bimbo expected the spot rate at the end of one year to beequal to purchasing power? parity, what would be the cost to Bimboof its dollar loan in? peso-denominated interest?b. What is the real interest cost? (adjusted for? inflation) to?Bimbo, in? peso-denominated terms, of borrowing the dollars forone? year, again assuming purchasing power?parity?c. If the actual spot rate at the end of the year turned out tobe Ps9.60/$?,what was the actual? peso-denominated interest cost ofthe? loan?