Assume that the Japanese 1-year interest rate is 5 percent, while the U.S. 1-year interest rate is
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Assume that the Japanese 1-year interest rate is 5 percent, while the U.S. 1-year interest rate is 8 percent.
What percentage change in the Japanese yen would cause a U.S. firm borrowing yen to incur the same effective financing rate as it would if it borrowed dollars?
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Kirti Kaushal
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