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Your client has been offered a money market security with a par value 1000 that matures in one year in the UK market. The current
Your client has been offered a money market security with a par value 1000 that matures in one year in the UK market. The current price on the market is 954. The current exchange rate (S0) is 1.54 $/. You also know that one year from now the exchange rate will be at 1.38 $/. What is the effective yield of this security if your client holds the bond until maturity?
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