Question
27 Six months ago, Qualitybank issued a $100 million, one-year maturity CD denominated in euros. On the same date, $60 million was invested in a
27 Six months ago, Qualitybank issued a
$100
million, one-year maturity CD denominated in euros. On the same date,
$60
million was invested in a
-denominated loan and
$40
million was invested in a U.S. Treasury bill. The exchange rate on this date was
1,(495)/($)
. Assume no repayment of principal and an exchange rate today of
(1.15)/(S)
.\ a. What is the current value of the CD principal (in euros and dollars)?\ b. What is the current value of the
-denominated loan principal (in dollars and euros)?\ c. What is the current value of the U.S. Treasury bill (in euros and dollars)?\ d. What is Qualitybank's profit/loss from this transaction (in euros and dollars)?
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