New York Greater Bank is a U.S. investment bank that wants to benefit from the interest rate differential between the euro area and Japan. A euro () costs $1.07 today, while a yen () costs $0.0096 today. The fund expects the exchange rates to still be $1.07 per euro and $0.0096 per yen in 11 months. Current annual interest rates are as follows:

Currency	Borrowing rate	Lending rate
Euro	7.3%	6.8%
Yen	4.5%	4.3%

The bank doesn't want to invest any of its own money, but can borrow 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 with the interest rates.

Part5

What is the value of loan, including principal and interest, after 11 months (in yen)?

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Attempt 2/10 for 10 pts.

Part6

What is the expected value of euros required to pay off the yen loan and interest (in euros):

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Attempt 2/10 for 10 pts.

Part7

What is the expected profit from the transaction (in euros)?

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Attempt 4/10 for 8 pts.

Part8

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