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4. Portland Ltd, an Australian firm, needs AUD10 million to finance a new project in USA. The company has the capacity to borrow either from

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4. Portland Ltd, an Australian firm, needs AUD10 million to finance a new project in USA. The company has the capacity to borrow either from an Australian bank which offers 7% (AUD loan) annual interest rate or from a USA bank which offers 6% (USD loan) annual interest rate. The loan expects to settle after one year period. You found following additional information: The current spot is USD1.0654/AUD One year forward rate is USD1.0455/AUD. Required: Recommend the loan which provides better off to the company

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