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Question 12 1 points Save Answer "A Bahamian manufacturing company has the opportunity to borrow...

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Question 12 1 points Save Answer "A Bahamian manufacturing company has the opportunity to borrow for one year from a local bank in the Bahamian dollar (BSD) at 12% or from Sun Trust in the USD at 8%. The BSD is pegged to the USD (UIRP does not hold), but after reviewing recent balance of payments data, the CFO of the Bahamian company believes that the Bahamian central bank will devalue the BSD during the next year such that the USD will appreciate 5% vs. the BSD. According to our class discussion, what is the (approx.) effective interest rate in BSD terms if the Bahamian company borrows from Sun Trust, all else equal?" 7 percent 15 percent 13 percent 12 percent 8 percent

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