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00. Suppose that instead of funding the $100 million investment in 12 percent British loans with U.S. CDs, the FI manager in problem 19 funds

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00. Suppose that instead of funding the $100 million investment in 12 percent British loans with U.S. CDs, the FI manager in problem 19 funds the British loans with $100 million equivaleqt ooe-year pound CDs at a rate of 8 percent. Now the balance sheet of the F would be as follows: a. Calculate the retum on the Frs investment portfolio, the avenge cost of funds, and the net return for the Fi if the spot foceign exchange nate falls to S1. IS/21 over the year. b. Calculate the return on the F's investment portfolio, the average cost of funds, and the net retum for the FT if the spot foreign exchange rate rises to $135/11 over the year

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