2. Welly Investment Co. is a U.S. firm that executes a carry trade in which it borrows curos (where interest rates are presently low) and invests in British pounds (where interest rates are presently high). Welly uses $200,000 of its own funds and borrows an additional 300,000 curos. It will pay 0.5 percent on its curos borrowed for the next month and cam 1 percent on funds invested in British pounds. Assume that the curo's spot rate is $1.20 and that the British pound's spot rate is $1.80. Welly uses today's spot rate as its best guess of the spot rate one month from now. What is Welly's expected profit from the carry trade? Suppose now the euro appreciated by 3 percent over the month against both the pound and dollar. What is Welly's expected profit? 3. For the last two years, Turkey's lira has depreciated by 60% against the Singapore dollar. By how much the Singapore dollar has appreciated against Turkey lira. 1