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Smart Banking Corp. can borrow $ 5 million at 6 percent annualized. It can use the proceeds to invest in Canadian dollars at 9 percent
Smart Banking Corp. can borrow $ million at percent annualized. It can use the proceeds to invest in Canadian dollars at percent annualized over a day period. The Canadian dollar is worth $ and is expected to be worth $ in days. Based on this information, should Smart Banking Corp. borrow US dollars and invest in Canadian dollars? What would be the gain or loss in US dollars?
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