Citizens Financial believes the British pound () will appreciate over the next 18 days from $1.23...
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Citizens Financial believes the British pound () will appreciate over the next 18 days from $1.23 to $1.26. The following annual interest rates apply: Currency Dollars British pound () Lending Rate 6.75% Borrowing Rate 7.25% 7.00% 7.30% Citizens Financial has the capacity to borrow either 5 million or $5 million. If Citizens Financial's forecast is correct, how shall Citizens Financial implement its speculating trading activities and what will its dollar profit be from speculation over the 18-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? (30/360 convention used for the interest calculation, i.e., assuming 360 days a year) Citizens Financial shall borrow 5 million. Doing so, Citizens Financial will realize the profit of $120,214.29. Citizens Financial shall borrow $5 million. Doing so, Citizens Financial will realize the profit of $118,107.14. Citizens Financial shall borrow 5 million. Doing so, Citizens Financial will realize the profit of $123,018.29. Citizens Financial shall borrow $5 million. Doing so, Citizens Financial will realize the profit of $121,753.05. Citizens Financial believes the British pound () will appreciate over the next 18 days from $1.23 to $1.26. The following annual interest rates apply: Currency Dollars British pound () Lending Rate 6.75% Borrowing Rate 7.25% 7.00% 7.30% Citizens Financial has the capacity to borrow either 5 million or $5 million. If Citizens Financial's forecast is correct, how shall Citizens Financial implement its speculating trading activities and what will its dollar profit be from speculation over the 18-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? (30/360 convention used for the interest calculation, i.e., assuming 360 days a year) Citizens Financial shall borrow 5 million. Doing so, Citizens Financial will realize the profit of $120,214.29. Citizens Financial shall borrow $5 million. Doing so, Citizens Financial will realize the profit of $118,107.14. Citizens Financial shall borrow 5 million. Doing so, Citizens Financial will realize the profit of $123,018.29. Citizens Financial shall borrow $5 million. Doing so, Citizens Financial will realize the profit of $121,753.05.
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