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As a Foreign exchange trader you have funds of CDN $3,500,000 to invest in a Canadian bank at an interest rate of 6.0% per annum

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As a Foreign exchange trader you have funds of CDN $3,500,000 to invest in a Canadian bank at an interest rate of 6.0% per annum for 1 year or in a UK bank puying 1.5% per annum for 1 year. The exchange rate (ET) today for CDN/GBP is 1.7000.00, and for 1 year forward (ET+1) it is 1.7050.00 (a) Calculate the percentage return on a CON dollar bank investment (RD). Then (b)calculate the percentage return on a UK bank investment (IF). Which holding will provide the best one for the bank.? Show all calculations (10 Marks)

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