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A one - year CD in United Europe is currently paying 5 % , and the exchange rate is currently 0 . 9 9 euros

A one

-

year CD in United Europe is currently paying

5 %,

and the exchange rate is currently

0.99

euros per dollar. If you believe the exchange rate will be

1.04

euros per dollar one year from now, what is the expected return in terms of dollars?

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