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Suppose that the annual interest rate on a dollar account in the U.S. is 8%, the interest rate on a euro account in Europe is

Suppose that the annual interest rate on a dollar account in the U.S. is 8%, the interest rate on a euro account in Europe is 7%. The expected rate of change in the exchange rate E_$/Euro over the year is -2%. Which investment is better? Why? Use approximate parity condition.

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