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How much profit can you make on the carry trade speculating on the appreciation of the EUro over the next 6 months compared to the
How much profit can you make on the carry trade speculating on the appreciation of the EUro over the next 6 months compared to the dollar? Start by borrowing $100,000 at the interest rate of 3%.
The current exchange rate is $1.1/ EURO
The anticipates exchange rate in 6 months is $1.39/ EURO
The interest rate in Europe is 7%.
Provide your answer in dollars, rounded to 2 decimals.
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