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You expect that the Mexican peso will appreciate against the Australian dollar from its spot rate of A$0.2673 to A$0.2912 in one year. The following
You expect that the Mexican peso will appreciate against the Australian dollar from its spot rate of A$0.2673 to A$0.2912 in one year. The following interbank lending and borrowing rates exist:
Lending Rate Borrowing Rate
Australian dollar 7.96% 8.77%
Mexican peso 8.04% 9.40%
You have a borrowing capacity of either 3 million Australian dollars or 4 million Mexican pesos in the interbank market. Without using your own deposited fund, estimate the profits in percentage. (enter 2 decimal places number with on sign or symbol)
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