a. If Asian countries experience a decline in economic growth, inflation and interest rate, how will their currency values be affected?

b. Bank X believes the New Zealand dollar will appreciate over the next five days from US$0.48 to US$0.50. The following annual interest rates apply:

Bank X has the capacity to borrow either NZ$10 million or US$5 million. If Bank X's forecast is correct, what will its dollar profit be from speculation over the five-day period?

Currency US Dollars (USS) New Zealand dollar (NZ$) Lending Rate 7.10% 6.80% Borrowing Rate 7.50% 7.25%