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Assume the following information regarding U.S. and Canadian annualized interest rates: Lending Rate Borrowing Rate Currency U.S. Dollar ($) Canadian Dollar (C$) 5.89% 6.35% 5.60%
Assume the following information regarding U.S. and Canadian annualized interest rates: Lending Rate Borrowing Rate Currency U.S. Dollar ($) Canadian Dollar (C$) 5.89% 6.35% 5.60% 6.00 % Piggy Bank can borrow either $20 million or C$30 million. Furthermore, Piggy Bank expects the spot rate of the Canadian dollar to be So.82 in 60 days (the current spot rate is So.80). What is the profit or loss from Piggy Bank's speculation if the spot rate 60 days from now is indeed So.82? a. $20.69 million b. $479,667 c. $454,200 Od. $20.21 million e. $502,166 Assume the following information regarding U.S. and Canadian annualized interest rates: Lending Rate Borrowing Rate Currency U.S. Dollar ($) Canadian Dollar (C$) 5.89% 6.35% 5.60% 6.00 % Piggy Bank can borrow either $20 million or C$30 million. Furthermore, Piggy Bank expects the spot rate of the Canadian dollar to be So.82 in 60 days (the current spot rate is So.80). What is the profit or loss from Piggy Bank's speculation if the spot rate 60 days from now is indeed So.82? a. $20.69 million b. $479,667 c. $454,200 Od. $20.21 million e. $502,166
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