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Interest rate in US (Rh): 3.5% Interest rate in Euro zone (Rh): 7.5% Line of credit in US: USD 10,000,000 Line of credit in in
| Interest rate in US (Rh): | 3.5% |
| Interest rate in Euro zone (Rh): | 7.5% |
| Line of credit in US: | USD 10,000,000 |
| Line of credit in in Euro zone: | EUR 8,000,000 |
| The spot rate of EUR, now (SR0): | $1.25 |
Suppose your forecast tells you that the spot rate of EUR one year later (SR1) will be $1.20. Then, your recommended investment strategy should earn a net profit of:
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Behavioral Finance
Authors: Edwin Burton, Sunit N. Shah
1st Edition
111830019X, 978-1118300190
