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Given interest rates: o Deposit rate: 0.40% in & 1.0% in o Borrow rate: 0.50% in & 1.1% in Investment Plan: o You use your

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Given interest rates: o Deposit rate: 0.40% in & 1.0% in o Borrow rate: 0.50% in & 1.1% in Investment Plan: o You use your own funds: $100 You can borrow additional funds either 250 or 200 Spot rates: 0 EUR/USD = 1.2 & GBP/USD = 1.5 Expectation: o USD is expected to depreciate by 2.5% against EUR in 1 month. o USD is expected to appreciate by 1.5% against GBP in 1 month. 1. Exchange rate in 1 month (1.8 points) a. EUR/USD = b. USD/EUR = C. GBP/USD = I d. USD/GBP = e. GBP/EUR = f. EUR/GBP

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