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its spot rate. Currency USD CAD ABI Bank expects that the USD will depreciate against the Canadian dollar from CAD 1.43 to $1.35 in

 

its spot rate. Currency USD CAD ABI Bank expects that the USD will depreciate against the Canadian dollar from CAD 1.43 to $1.35 in 90 days. The following interbank lending and borrowing rates exist Annual Borrowing Rate 4% 4.5% Annual Lending Rate 3% 4% ABI Bank has a borrowing capacity of either USD 10 million or CAD 15 million in the interbank market. depending on which currency it wants to borrow. Can ABI Bank attempt to capitalize on its expectations? How? If yes, estimate the profits that could be generated from the strategy.

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