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A firm forecasts the euro's value as follows for the next year: Possible Percentage Change Probability...

A firm forecasts the euro's value as follows for the next year: Possible Percentage Change Probability 2% 10% 3% 50% 6% 40% The annual interest rate on the euro is 7 percent. The expected value of the effective financing rate from a U.S. firm's perspective is about:

a. 8.436 percent

b. 11.112 percent

c. 10.959 percent.

d. 11.541 percent.

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Answer #1

Fid avein probabilit Computation ol effective franci expecded val l+子 Io 0 48 4.R6 It37 10.2以 ( 43 13.42 So, expectedValue !

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