A U.S. firm forecasts the euro's value as follows for the next year: Probability of Occurrence...

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A U.S. firm forecasts the euro's value as follows for the next year: Probability of Occurrence 10% 55% 35% The annual interest rate on the euro is 7 percent. (1) Compute the effective financing rate for a 1-year loan from the perspective of the U.S. firm. (2) Will the effective financing rate be higher or lower if the euro interest rate changes to 7.%? Explain. Percentage Change - 3% 2% 4% A U.S. firm forecasts the euro's value as follows for the next year: Probability of Occurrence 10% 55% 35% The annual interest rate on the euro is 7 percent. (1) Compute the effective financing rate for a 1-year loan from the perspective of the U.S. firm. (2) Will the effective financing rate be higher or lower if the euro interest rate changes to 7.%? Explain. Percentage Change - 3% 2% 4%