7. Kurnick Co. expects that the pound will depreciate from $1.70 to $1.68 in one year. It has no money to invest, but it could borrow money to invest. A bank allows the company to borrow either 1 million dollars or 1 million pounds for one year. It can borrow British pounds at 5% for one year and can invest in a risk-free dollar deposit at 5% for one year. Determine the expected profit or loss (in dollars) if Kurnick Co. pursues a strategy to capitalize on the expected depreciation of the pound. 1