1. EUR/INR spot rate = 67.40 Euro interest rate is 1% per year, or 0.5% per 180 days. Indian Rupee interest rate is 2.5% per year, or 1.25% per 180 days. The trade borrows EUR20,000,000 today. Assume that the EUR/INR spot rate will stay the same in 180 days, or 67.40, what would be the profit/loss be if the same trade strategy mentioned in the slides is used?

a. profit of EUR150,000

b. profit of EUR250,000

c. profit of EUR350,000

d. loss of EUR150,000