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Assume that the Australian borrowing rate for a New Zealand firm is 15%, and the New Zeland cost is also 15%. Let's the AUD has
Assume that the Australian borrowing rate for a New Zealand firm is 15%, and the New Zeland cost is also 15%. Let's the AUD has the following probability distribution of possible foreign exchange rates: Probability% change AUDAUD interest rate 0.5 -0.13 0.15 0.5 0.05 0.15 There is a chance that the effective New Zealand borrowing cost in Australian dollar would be higher than the weighted average cost of_. Select one: a, 50%, 6.4% b. 50%, 10.40% c. 50%, 20.75%
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