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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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