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Assume that the Yen is expected to appreciate by 3.5% annually against the U.S. dollar. If a U.S. company can borrow dollars for 5%, and

Assume that the Yen is expected to appreciate by 3.5% annually against the U.S. dollar. If a U.S. company can borrow dollars for 5%, and is trying to minimize its expected financing cost, what is the highest interest rate it should be willing to pay to borrow Yen?

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