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Denim Industries can borrow its needed financing for expansion using one of two foreign lending facilities. It can borrow at a nominal annual interest rate

Denim Industries can borrow its needed financing for expansion using one of two foreign lending facilities. It can borrow at a nominal annual interest rate of

88%

in Mexican pesos or it can borrow at

55%

in Canadian dollars. If the peso is expected to depreciate by

11.9511.95%

and the Canadian dollar is expected to appreciate by

66%,

which loan has the lower effective annual interest rate?

The effective annual interest rate of the loan in Mexican pesos is

nothing%.

(Round to two decimal places.)

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