Currently, the company is considering to issue commercial paper for its short-term financing. The quoted rate on the RM denominated euro commercial paper has just blipped down recently. Your company can issue RM5 million of 60 days euro commercial paper in the French markets at 3.25%. Besides that, your company can invest the proceeds in Malaysia with a comparable maturity negotiable RM denominated certificates of deposit which are quoting 3.55%.

a. Ignoring any transaction costs, how much can NT Bhd earn by borrowing in the euro markets and investing in Malaysia. Is this a good deal? Should you expect it to last? Explain. (12 marks)