Multiple Choice
Assume the U.S. one-year interest rate is 9%, while the Chilean one-year interest rate is 13%. If the Chilean peso ____ by ____%, a U.S.-based MNC would incur the same financing cost in dollars versus Chilean pesos over a one year period.
A) depreciates; 3.54
B) appreciates; 3.54
C) depreciates; 3.67
D) appreciates; 3.67
Correct Answer:
Verified
Correct Answer:
Verified
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