3. On checking the Telerate screen, you see the following exchange rate and interest rate quotes: Currency Annual lending and borrowing Spot rates 30-day forward rates rates US Dollars 6.72% - 7.20% New Zealand 6.48% -6.96% $0.50 $0.52 How can you engage in money market instruments (i.e borrowing and investing) to make a profit? Ensure to state the interest rate, adjusted interested rate and exchange rate you will use at each stage. Assume you can either borrow US$ 20m or NZ$20m. Assume you are investing for 30 days. a. Which currency appreciated and by how much? Show the computation Formula: Computations: Interpret the results: b. It is logical to borrow US dollars or New Zealand dollars? Fully explain c. Use the table below to clearly show your work. Steps: Ex rate Interest Rate Adj int rate Computations 14 4. Analysis of Factors Arecumy me Equmbrium Exchange Rates 3. On checking the Telerate screen, you see the following exchange rate and interest rate quotes: Currency Annual lending and borrowing Spot rates 30-day forward rates rates US Dollars 6.72% - 7.20% New Zealand 6.48% -6.96% $0.50 $0.52 How can you engage in money market instruments (i.e borrowing and investing) to make a profit? Ensure to state the interest rate, adjusted interested rate and exchange rate you will use at each stage. Assume you can either borrow US$ 20m or NZ$20m. Assume you are investing for 30 days. a. Which currency appreciated and by how much? Show the computation Formula: Computations: Interpret the results: b. It is logical to borrow US dollars or New Zealand dollars? Fully explain c. Use the table below to clearly show your work. Steps: Ex rate Interest Rate Adj int rate Computations 14 4. Analysis of Factors Arecumy me Equmbrium Exchange Rates