Question: As a US multinational you decide to borrow long-term debt of 1 million KRW at 10% for one year. The exchange rate on the date

As a US multinational you decide to borrow long-term debt of 1 million KRW at 10% for one year. The exchange rate on the date you borrowed the debt is 100 KRW / $ and the exchange rate on the date you repaid the debt is 120 KRW / $. What is the nominal cost of borrowing the KRW debt in US$ terms?

8.33%
-11.83%
+ 11.83%

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