Assume that the interest rate in New Zealand is 9 percent. A U.S. firm plans to borrow
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Assume that the interest rate in New Zealand is 9 percent. A U.S. firm plans to borrow New Zealand dollars, convert them to U.S. dollars, and repay the loan in 1 year. What will be the effective financing rate if the New Zealand dollar depreciates by 6 percent? If the New Zealand dollar appreciates by 3 percent?
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