Question
A firm has the following forecast for the peso's value in one year: Possible Percentage Change...
A firm has the following forecast for the peso's value in one
year:
|
Possible |
|
|
Percentage Change |
Probability |
|
-1% |
10% |
|
2% |
50% |
|
4% |
40% |
The annual interest rate on the peso is 8%. The expected value of
the effective financing rate from a U.S. firm's perspective is
about:
Select one:
a. 10.631%.
b. 10.500%.
c. 10.700%.
d. 10.753%.
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Answer #1
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