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A currency dealer has good credit and can borrow either $1,000,000 or 800,000 for one year. The one- year interest rate in the U.S. is

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A currency dealer has good credit and can borrow either $1,000,000 or 800,000 for one year. The one- year interest rate in the U.S. is i$ 2% and in the euro, zone the one-year interest rate is i = 6%. The spot exchange rate is $1.25 = 1.00 and the one-year forward exchange rate is $1.20 1.00 e) If you want to keep your profits in S, how much of the investing currency is converted to the borrowing currency? f) State the $ profit

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