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

---

Definitions:

Pay

The act of giving money in exchange for goods, services, or to fulfill a financial obligation.

Mutual Fund

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.

Annual Return

The percentage gain or loss on an investment over a one-year period.

Graduation

This term is typically associated with the completion of a course of study at an educational institution, marked by the receipt of a diploma or degree.