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Assume the annualized interest rates for lending and borrowing in US are 5.89% and 6.35 %. Likewise, in Canada, the lending and borrowing rates are
Assume the annualized interest rates for lending and borrowing in US are 5.89% and 6.35 %. Likewise, in Canada, the lending and borrowing rates are 5.69% and 6.00%. Malone Bank can borrow either $20 million or 30 million canadian dollar. Malone Bank expects the spot rate of the Canadian dollar to be $0.81 in 60 days (the current spot rate is 0.80). What is Piggy Bank's profit or loss from speculation if the spot rate 60 days from now is indeed $0.81? ASAP pls!
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