Question
Six months ago, Qualitybank issued a $106 million, one-year-maturity CD, denominated in British pounds (Euro CD). On the same date, $63 million was invested in
Six months ago, Qualitybank issued a $106 million, one-year-maturity CD, denominated in British pounds (Euro CD). On the same date, $63 million was invested in a -denominated loan and $43 million in a U.S. Treasury bill. The exchange rate on this date was 1.5382 for $1. If you assume no repayment of principal and if todays exchange rate is 1.1905 for $1:
What is the current value of the Euro CD principal in dollars and pounds?
What is the current value of the British loan principal in dollars and pounds?
What is the current value of the U.S. Treasury bill in dollars and pounds? What is Qualitybanks profit/loss from this transaction in dollars and pounds?
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Introduction To Corporate Finance
Authors: William L. Megginson, M.D. Lucey Brian C., Scott J. Smart, Scott B. Smart, Bill Megginson
1st Edition
184480562X, 9781844805624
