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Suppose the price indexes in Mexico and the U.S., which both began the year at...

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Accounting

Suppose the price indexes in Mexico and the U.S., which both began the year at 100, are at 160 and 120, respectively, by the end of the year. If the exchange rate began the year at $0.25/M$ and ended the year at $0.2/M$. What is the real exchange at the end as a direct quote in the U.S.? (Home country = U.S. & Foreign country = Mexico)

a. $0.2667/M$

b. $0.1875/M$

c. $0.15/M$

d. $0.3333/M$

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