[Solved] Today, March 31, 2022 we observe the foll

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Today, March 31, 2022 we observe the following: Japan: iJ = 2% Eurozone: iE = 6% Spot / = 118.6412 Today, an individual will undertake

Today, March 31, 2022 we observe the following: Japan: iJ = 2% Eurozone: iE = 6% Spot / = 118.6412

Today, an individual will undertake a one-year carry trade by borrowing 10 million.

In one year (i.e. on March 31, 2023) it turns out the Spot / = 116.6242.

Calculate the gain or loss from the carry trade. Show the calculation and explain each step the individual undertakes.

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