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[Level of Interest Rates] In January 2011, a Japanese investor placing money in dollar denominated assets desires a 5% real rate of return. Then international

[Level of Interest Rates] In January 2011, a Japanese investor placing money in dollar denominated assets desires a 5% real rate of return. Then international expected inflation rate is about 2.5% and the dollar is expected to decline against Japanese Yen by 10% over the investment period. What is the minimum required rate of return for this Japanese investor?

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