The Next Questions Refer to the Following

question 25

Multiple Choice

The next questions refer to the following.
Suppose the yen-pound exchange rate is currently £1 = ¥300. A Japanese bank borrows £2 million from UK lenders for 1 year at 6% interest, and lends ¥600 million to Japanese borrowers for 1 year at 8% interest.
-The bank's expected net gain is

• A) ¥40,000
• B) ¥48,000
• C) ¥360,000
• D) ¥12,000,000
• E) ¥24,000,000

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