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

Possible
Percentage Change	Probability
-2%	20%
2%	40%
3%	40%

The annual interest rate on the peso is 7%. The expected value of the effective financing rate from a U.S. firm's perspective is about:

Select one:

a.

8.631%.

b.

7.750%.

c.

9.728%.

d.

8.712%.