Expectations of Depreciation and Investing. Individuals wishing to invest in Turkey in 2006 had two choices. They could invest in bonds that would pay returns in 2007 in Turkish lira and earn 14.7...

Expectations of Depreciation and Investing. Individuals wishing to invest in Turkey in 2006 had two choices. They could invest in bonds that would pay returns in 2007 in Turkish lira and earn 14.7 percent, or they could invest in Turkish bonds that would pay returns in U.S. dollars but earn only 5.2 percent. From this data, what do you think the market believes is the expected rate of depreciation of the Turkish lira against the U.S. dollar? Explain.