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please answer the second part The government of country B pegged the value of their currency, called pesos, to the currency of government A, called

please answer the second part

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The government of country B pegged the value of their currency, called pesos, to the currency of government A, called dollars, at 11 pesos per dollar. Because interest rates in country B were higher than those in the country A, many investors (including banks) bought bonds in country B to earn higher returns than were available in the country A. The benets of the higher interest rates, however, masked the possibility that the peso would be allowed to oat and lose substantial value compared to the dollar. Suppose you are an investor and believe that the probability of the exchange rate for the next year remains at 11 pesos per dollar is 0.7, but that the rate could soar to 22 per dollar with probability 0.3. Complete parts (a) through (0) below. (a) Suppose you are a resident of country A. Consider two investments: Deposit $5,000 today in a savings account in countryA that pays 7% annual interest or deposit $5,000 in an account in country B that pays 13% interest. The latter requires converting the dollars into pesos at the current rate of 11 pesos/dollar and then, after a year, converting the pesos back into dollars at whatever rate then applies. Which choice has the higher expected value in one year? What is the expected value of the investment if you invest in a savings account in country A? $ 5350 (Type an integer or a decimal.) What is the expected value of the investment if you invest in a savings account in country B and then convert back to dollars? $D (Type an integer or a decimal.)

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