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Suppose the U.S. one-year interest rate is 3% per year, while a foreign country has a one-year interest rate of 5% per year. Ignoring risk and transaction costs, a U.S. investor should invest in foreign bonds as long as the expected yearly rate of depreciation of the foreign currency isa. less than 5%.b. greater than 5%.c. greater than 2%.d. less than 2%.e. less than 1%.
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