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JP Morgan raises funds by issuing a $100,000 one-year CD (a liability) at 3%. It uses the funds to make a one-year loan at 5%

JP Morgan raises funds by issuing a $100,000 one-year CD (a liability) at 3%. It uses the funds to make a one-year loan at 5% in Australian dollars (A$). At the current exchange rate $0.80/A$, the amount of the AS$ loan is __________, and JP Morgan's profits from these transactions will be adversely affected if ___________.

A$100,000; the Australian dollar appreciates against the US$.

A$125,000; the Australian dollar appreciates against the US$.

A$125,000; the Australian dollar depreciates against the US$.

None of the above.

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