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A currency dealer has good credit and can borrow either S500,000 or 400,000 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 S500,000 or 400,000 for one year. The one year interest rate in the U.S. is is-2% and in the euro zone the one year interest rate is ie6%. The spot exchange rate is $1.25-1.00 and the one year forward exchange rate is S1.20-1.00 E, F, G and H 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 S profit. g) If you want your profit to be in , how much of the investing currency is converted to the borrowing currency? h) State the profit

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