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A financial manager at a US-based firm believes that interest rates in Europe are low. The company borrows euros at 4% for 1 year. During

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A financial manager at a US-based firm believes that interest rates in Europe are low. The company borrows euros at 4% for 1 year. During this time period, the dollar rises 8% against the euro. International wire transfers cost 2%. What is the ERI on the loan for one year from a US perspective? Explain your result

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