Assume that the Venezuelan one-year interest rate is 90%, while the UK one-year interest rate is 6%.

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Assume that the Venezuelan one-year interest rate is 90%, while the UK one-year interest rate is 6%.

Determine the break-even value for the percentage change in Venezuela’s currency (the bolivar) that would cause the effective yield to be the same for a one-year deposit in Venezuela as for a one-year deposit in the United Kingdom.

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