Assume that annual interest rates are 1.6 percent in the United States and 0.6 percent in Japan. A Bank can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is US$0.007/4 and the forward rate is US$0.0075/. If the bank borrows a sum of US$2million, what is the expected spread measured in dollars? NOTE: Do not write comma () or any $ or symbols, USD/Yen etc in your answer. Simply write the absolute value as your answer. For example: if you answer is $150,000, simply write 150000 Answer: Assume that annual interest rates are 1.6 percent in the United States and 0.6 percent in Japan. A Bank can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is US$0.007/4 and the forward rate is US$0.0075/. If the bank borrows a sum of US$2million, what is the expected spread measured in dollars? NOTE: Do not write comma () or any $ or symbols, USD/Yen etc in your answer. Simply write the absolute value as your answer. For example: if you answer is $150,000, simply write 150000