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1) Given the information: Interest rate in US (Rh) 4% Interest rate in Canada (Rh): 6% Line of credit in US USD 10,000,000 Line of
1) Given the information:
Interest rate in US (Rh) 4%
Interest rate in Canada (Rh): 6%
Line of credit in US USD 10,000,000
Line of credit in Canada CAD 12,500,000
The spot rate for CAD (SR0): $0.80
if your forecast tells you that the spot rate of cad one year later (SR1) will be $0.775 then you recommended investement strategy should earn a net profit of
a) USD 250000
b) 200000
c) 169355
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