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Akron Co. needs dollars. Assume that the local one-year loan rate is 15 percent, while a one-year loan rate on euros is 7 percent and

  1. Akron Co. needs dollars. Assume that the local one-year loan rate is 15 percent, while a one-year loan rate on euros is 7 percent and that an international borrowing is subject to a transaction cost of 0.045 percent. By how much must the euro appreciate to cause the loan in euros to be more costly than a US dollar loan?

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