Question: Suppose that there is a 0.5% probability that the government of Argentina will nationalize its banking system and freeze all foreign deposits indefinitely during the

Suppose that there is a 0.5% probability that the government of Argentina will nationalize its banking system and freeze all foreign deposits indefinitely during the next year. If the dollar deposit interest rate in the United States is 5%, what dollar interest would Argentine banks have to offer in order to attract deposits from foreign investors?

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