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Check Answer please BFB Bank believes the New Zealand dollar will appreciate over the next five days from $.48 to $.50. The following annual interest
Check Answer please
BFB Bank believes the New Zealand dollar will appreciate over the next five days from $.48 to $.50. The following annual interest rates apply:
Currency Lending RateBorrowing Rate
Dollars.0710.0723
New Zealand dollar (NZ$)0.0647.0725
BFB Bank has the capacity to borrow either NZ$10,000,000 or $4,800,000. If BFB Bank's forecast if correct, what will its dollar profit be from speculation over the fiveday period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)?
Answer = 201,577
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