6. Use the following lending and borrowing rates for institutions and individuals conducting carry trades and apply to the two situations below. Currency Lending Rate Borrowing Rate U.S. Dollars 3.4% 3.9% Chinese Yuan 4.9% 5.4% Eurodollar 4.4% 4.9% Situations: Steve Smith recognizes and opportunity to borrow in the U.S. and deposit in a Chinese bank. Assuming the value of the Yuan is 7.11 per $1.00 and the exchange rate remains steady over the next 30 days, how much can Steve net if he borrows $100,000 and invest in the Chinese Bank for 30 days? (part 1) What if Steve is concerned with the movement of the Yuan over the next 30 days? How much could the Yuan fluctuate and Steve still net some profit from the carry? (part 2) Use the boxes below to answer parts 1) and 2) of the problem. (show work) Part 1) 1 Part 2) ates) FOCUS