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Please show all work Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50% in &1.1% in - Investment Plan: -
Please show all work
Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50% in &1.1% in - Investment Plan: - You use your own funds: $100 - You can borrow additional funds either 250 or 200 - Spot rates: - EUR/USD =1.2 \& GBP/USD=1.5 - Expectation: - USD is expected to depreciate by 2.5% against EUR in 1 month. - USD is expected to appreciate by 1.5% against GBP in 1 month 1. Where to borrow? (1point) So, it is cheaper to borrow from GPB. So, it is better to invest in Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50% in &1.1% in - Investment Plan: - You use your own funds: $100 - You can borrow additional funds either 250 or 200 - Spot rates: - EUR/USD =1.2 \& GBP/USD=1.5 - Expectation: - USD is expected to depreciate by 2.5% against EUR in 1 month. - USD is expected to appreciate by 1.5% against GBP in 1 month 1. Where to borrow? (1point) So, it is cheaper to borrow from GPB. So, it is better to invest in Step by Step Solution
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