3 Smart Banking plc can borrow 5 million at 6% annualized. It can use the proceeds to...
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3 Smart Banking plc can borrow £5 million at 6%
annualized. It can use the proceeds to invest in US dollars at 9% per year over a six-day period. The US dollar is worth £0.60 and is expected to be worth
£0.59 in six days. Based on this information, should Smart Banking plc borrow pounds and invest in US dollars? What would be the gain or loss in pounds?
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