21 Speculation. Diamond Bank expects that the Singapore dollar will depreciate against the euro from its spot rate of 0.48 euros to 0.45 euros in 60 days. The following interbank lending and borrowing rates exist:

Diamond Bank considers borrowing 10 million Singapore dollars in the interbank market and investing the funds in euros for 60 days. Estimate the profits (or losses) that could be earned from this strategy.
Should Diamond Bank pursue this strategy?

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Currency Lending rate Borrowing rate Euro 7.0% 7.2% Singapore dollar 22.0% 24.0%