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I can't figure out how to calculate this problem. Question 39 1 / 1 pts 2 A currency speculator expects the spot rate of British
I can't figure out how to calculate this problem.
Question 39 1 / 1 pts 2 A currency speculator expects the spot rate of British Pounds (GBP) to change from $2.00 to $2.20 in 6-months. Assume the speculator has access to credit lines of USD 20,000,000 in the US and GBP 10,000,000 in UK. The annual borrowing and lending rates are 6 percent in US and 4 percent in UK. If his forecast turns out be to true, at the end of the 6- month period, the speculator's expected profit will be: GBP 763,636 USD 400,000 Correct! GBP 836,364 USD 200,000Step by Step Solution
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