Green Charter Bank is a U.S. money center bank that wants to speculate on the dollar-yen exchange rate. A yen () costs $0.0091 today. The bank expects it to cost $0.0081 in 3 months. Current annual interest rates are as follows:

Currency	Borrowing rate	Lending rate
Yen	4.5%	4.1%
U.S. dollar	7.2%	6.9%

The bank doesn't want to use any of its own money, but could borrow either $10,000,000 or 1,000,000,000.

Assume there are 30 days in every month and 360 days per year. Ignore compounding when working withthe interest rates.

What amount of home currency is expected to be needed to pay back the loan with interest (in $)?

Submit

Attempt 3/10 for 10 pts.

Part6

What is the expected profit from the trade (in $)?