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Assume that the interest rate on a 1-year insured home country bank deposit is 11% and the interest rate on a 1-year insured foreign bank

Assume that the interest rate on a 1-year insured home country bank deposit is 11% and the interest rate on a 1-year insured foreign bank deposit is 12%. At what percentage would the foreign currency have to change over 1-year (investment horizon) for the two investments to be similar? Explain the implications.

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