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Suppose the euro (EUR) is pegged to the British pound (GBP). You think there is a 20% probability that the EUR will be revalued by

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Suppose the euro (EUR) is pegged to the British pound (GBP). You think there is a 20% probability that the EUR will be revalued by +7% over the course of the next 6 months. What interest differential per annum would prevent you from speculating by borrowing EUR and lending GBP? Select one: a. 1.4% b. 7% c2.8% d. 4.2%

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