Effective yield. Assume that the one-year UK interest rate is 10% and the one-year US interest rate

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Effective yield. Assume that the one-year UK interest rate is 10% and the one-year US interest rate is 13%. If a UK firm invests its funds in the US, by what percentage will the dollar have to depreciate to make its effective yield the same as the UK interest rate from the UK firm’s perspective?

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