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A firm has the following forecast for the peso's value in one year: Possible Percentage Change Probability -1% 10% 2% 50% 4% 40% The annual

A firm has the following forecast for the peso's value in one year:

Possible

Percentage Change

Probability

-1%

10%

2%

50%

4%

40%

The annual interest rate on the peso is 8%. The expected value of the effective financing rate from a U.S. firm's perspective is about:

Select one:

a. 10.631%.

b. 10.500%.

c. 10.700%.

d. 10.753%.

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