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The Chinese yuan has an annual interest rate of 4.5 percent and is expected to appreciate by 3 percent against the dollar.(1) From a U.S.
The Chinese yuan has an annual interest rate of 4.5 percent and is expected to appreciate by 3 percent against the dollar.(1) From a U.S. perspective, calculate the effective financing rate from borrowing yuan; (2) would the financing rate be higher or lower if the Chinese yuan depreciates against the dollar?Explain.
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