Assume the Following Information Regarding U

question 28

Multiple Choice

Assume the following information regarding U.S. and European annualized interest rates:
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Trensor Bank can borrow either $20 million or €20 million. The current spot rate of the euro is $1.13. Furthermore, Trensor Bank expects the spot rate of the euro to be $1.10 in 90 days. What is Trensor Bank's dollar profit from speculating if the spot rate of the euro is indeed $1.10 in 90 days?
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• A)$579,845.
• B)$583,800.
• C)$588,200.
• D)$584,245.
• E)$980,245.

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Definitions:

Education

The process of receiving or giving systematic instruction, especially at a school or university.

Experience

The knowledge or skill acquired by observing, encountering, or undergoing something, typically influencing behavior or response to similar future events.

Cerebral Cortex

The cerebral cortex is the outer layer of the brain, involved in high-level brain functions such as thought, language, and consciousness.

Corpus Callosum

The corpus callosum is a wide band of nerve fibers connecting the left and right hemispheres of the brain, facilitating interhemispheric communication.