1. Six months ago, Qualitybank Ltd issued a $100 million, one-year maturity CD denominated in euro (euro CD). On the same date, $60 million was invested in a euro-denominated loan and A$40 million was invested in an Australian Treasury Bond. The exchange rate on this date was €1.7382/A$1.

Assume no repayment of principal and an exchange rate today of €1.3905/A$1.

What is the current value of the euro CD principal (in A$ and €)?

What is the current value of Qualitybank’s loan principal (in A$ and €)?

What is the current value of the Australian Treasury Bond (in A$ and €)?

What is Qualitybank’s profit/loss from this transaction (in A$ and €)? LO 4.5