Question
Six months ago, Qualitybank, issued a $100 million, one-year maturity CD denominated in euros. On the same date, $60 million was invested in a -denominated
Six months ago, Qualitybank, issued a $100 million, one-year maturity CD denominated in
euros. On the same date, $60 million was invested in a -denominated loan and $40 million
was invested in a U.S. Treasury bill. The exchange rate on this date was 1.7382/$.
Assume no repayment of principal and an exchange rate today of 1.3905/$.
a. What is the current value of the CD principal (in euros and dollars)?.
b. What is the current value of the euro-denominated loan principal (in euros and
dollars)?
c. What is the current value of the U.S. Treasury bill (in euros and dollars)?
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Cases in Finance
Authors: Jim DeMello
3rd edition
1259330476, 1259330478, 9781259352652 , 978-1259330476
