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Baylor Bank believes the New Zealand dollar will appreciate over the next five days from $.48 to $.50. The following annual interest rates apply: Currency
Baylor Bank believes the New Zealand dollar will appreciate over the next five days from $.48 to $.50. The following annual interest rates apply: Currency Dollars New Zealand dollar (NZS) Lending Rate 7.10% 6.80% Borrowing Rate 75.0% 1 25% Baylor Bank has the capacity to borrow either NZ$1o million or $5 million. If Baylor Bank's forecast is correct, what will its dollar profit be from speculation over the five-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? a. $500,520 O b. $208,044 c. $104,262. O d, $521,325. O e. $413,419
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