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Reagan Bank believes the New Zealand dollar will appreciate over the next five days from $0.45 to $.50. The following annual interest rates apply: Currency

Reagan Bank believes the New Zealand dollar will appreciate over the next five days from $0.45 to $.50. The following annual interest rates apply:

Currency Lending Rate Borrowing Rate Dollars 7.10% 7.50% New Zealand Dollars (NZ$) 6.80% 7.25%

Reagan Bank has the capacity to borrow either NZ$10 million or $5,200,000 million. If Reagan Bank's forecast if correct, what will its dollar profit be from speculation over the fiveday period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)?

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