Six months ago. Qualitybank issued a $100 million, one-year-maturity CD, denominated in British pounds (Euro CD). On

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Six months ago. Qualitybank issued a $100 million, one-year-maturity CD, denominated in British pounds (Euro CD). On the same date, $60 million was invested in a -denominated loan and $40 million in a U.S. Treasury bill. The exchange rate on this date was 1.5382 for $1. If you assume no repayment of principal and if today's exchange rate is 1.1905 for $1: (LG 19-1)

a. What is the current value of the Euro CD principal in dollars and pounds?

b. What is the current value of the British loan principal in dollars and pounds?

c. What is the current value of the U.S. Treasury bill in dol- lars and pounds?

d. What is Qualitybank's profit/loss from this transaction in dollars and pounds?

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Financial Markets And Institutions

ISBN: 9780078034664

5th Edition

Authors: Anthony Saunders, Marcia Cornett

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