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You are a Peruvian Copper firm located in Peru and you would like to borrow capital in your domestic currency the Peruvian nuevo sol(PEN for

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You are a Peruvian Copper firm located in Peru and you would like to borrow capital in your domestic currency the Peruvian nuevo sol(PEN for your activities. The current borrow rates by your domestic banks are 3-31%. due to high inflation in Peru, and deposit rates are 2.75%. A London bank offers PEN deposit rates of 2.95% and lending rates of 3.20%. The current exchange rate is 1 Pen = 0.22 GBP. What is the rate spread for domestic bank What is the rate spread for the London bank = Which market would you prefer to borrow in, domestic euromarket If you are a Peruvian oil firm with cash surplus that you would like to invest, would you prefer to deposit and earn interest in domestic euromarket

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