Suppose that California Co, a U.S. based MNC, seeks to capitalize a difference in interest rates between euros and British pounds via the use of a carry trade, In particular, after 1 month, funds invested in euros will yield a 0.50% percent return, while funds invested in pounds will yieid a return of 2.00\% percent. Currently the spot rate of the Gritish pound is $1.00 while the spot rate of the euro is $0.80. . In other words, the pound is worth 1.25 euros. California Co. expects these spot rates to remain constant over the next month. After repaying their euro loan, California. Co. has 108,000 pounds remaining. Assume that the exchange rate is stilis1.00 per pound. These pounds are equivalent to 5 which represents a profit of 5 over the initial $100,000 that. Callfornia Co. used from their own funds