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Assume that the Australian one-year interest rate is 3% and the one-year interest rate on...

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Finance

Assume that the Australian one-year interest rate is 3% and the one-year interest rate on euros is 5%. You borrow A$100,000 to invest. The euro's spot exchange rate is A$1.35. What is the rate of return on your investment if you invest in euro market, when the international Fisher effect (IFE) holds?

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