=+LG 3 LG 5 E194 Carry Trade Inc. borrows yen when the yen is trading at 110/US$.

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=+LG 3 LG 5 E19–4 Carry Trade Inc. borrows yen when the yen is trading at ¥110/US$. If the nominal annual interest rate of the loan is 3% and at the end of the year the yen trades at

¥120/US$, what is the effective annual interest rate of the loan?

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Principles Of Managerial Finance

ISBN: 9781292261515

15th Global Edition

Authors: Chad J. Zutter, Scott Smart

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