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Assume the U

Question 2

Multiple Choice

Assume the U.S. financing rate is 10 percent and that the financing rate in Germany is 9 percent. The expected cost of financing in dollars and financing in euros next year would be the same if the euro is expected to:


A) appreciate by 0.92 percent.
B) depreciate by 0.92 percent.
C) appreciate by 1.00 percent.
D) depreciate by 1.00 percent.

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