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The following condition exist in the international financial markets: interest rate in Turkey = 6% interest rate in South Korea = 2% expected appreciation of

The following condition exist in the international financial markets:

interest rate in Turkey = 6%

interest rate in South Korea = 2%

expected appreciation of the South Korean won relative to the Turkish lira = 3%

A Turkish investor can expect to earn a _____ rate of return on an investment in South Korea.

2%

5%

-1%

3%

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