Question
Assume the Thai Bhat interest rate is 7% and the U.S. dollar rate is 4%. If Thai bhat are borrowed by a U.S. firm, they
Assume the Thai Bhat interest rate is 7% and the U.S. dollar rate is 4%. If Thai bhat are borrowed by a U.S. firm, they would have to _____ against the dollar by _____ in order to have the same effective financing rate as borrowing dollars.
| a. | appreciate; about 3.00% | |
| b. | depreciate; about 3.00%
| |
| c. | depreciate; about 2.80 %
| |
| d. | appreciate; about 2.80 %
|
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