The inflation rates in the USA and in Thailand are 3% and 5%, respectively. Expansion projects in the area of manufacturing typically bring a 7% annual return in the USA. If a USA-based company wanted to expand its operations in Thailand, it would need to use % for the discount rate in order to calculate the project's Net Present Value using the foreign currency approach. Fill out the digits for the discount rate. Use "0" for any blanks.

In general, in real terms, the relevant discount rate for a project should be the same regardless of which country it is taking place. This is based on the . Pick a number that corresponds to the correct item in the table below.

1 Interest Rate Parity 2 Unbiased Forward Rates 3 Cross-rate 4 International Fisher Effect 5 Covered Interest Arbitrage