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According to the international fisher effect, if investor purchases a 5 year U.s. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6% then the investor must be expecting the _______ to _______ at a rate of at least 1% per year over 5 years.

a. british pound; appreciate

b. British pound; revalue

c. u.s.dollar; appreciate

d. us dollar; depreciate

Please show me how you get the answer, not just the answer

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Financial Management, Finance

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