Assume that you forecast the value of the euro as follows for the next year:
$\begin{array}{cccc}
\underline {\text { Percentage Change} }&\underline{ \text { Probability of Occurrence }} \
\text {-2\% } &30\%\
\text { 3\% } &40\%\
\text { 5\% } &30\%\
\end{array}$

If the interest rate on the euro is 12%, the expected effective yield from a euro-denominated deposit is:

Question

Assume that you forecast the value of the euro as follows for the next year:
$\begin{array}{cccc}
\underline  {\text {  Percentage Change} }&\underline{   \text { Probability of Occurrence }} \
 \text {-2\%  } &30\%\
 \text { 3\% } &40\%\
 \text { 5\% } &30\%\
\end{array}$
 
If the interest rate on the euro is 12%, the expected effective yield from a euro-denominated deposit is:

Quizplus · Accepted Answer

The Answer of Assume that you forecast the value of the euro as follows for the next year:
$\begin{array}{cccc}
\underline  {\text {  Percentage Change} }&\underline{   \text { Probability of Occurrence }} \
 \text {-2\%  } &30\%\
 \text { 3\% } &40\%\
 \text { 5\% } &30\%\
\end{array}$
 
If the interest rate on the euro is 12%, the expected effective yield from a euro-denominated deposit is:

Assume That You Forecast the Value of the Euro as Follows