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Assume the Following Information \bullet Interest Rate on Borrowed Euros Is 5 Percent Annualized

question 71

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Assume the following information.
\bullet Interest rate on borrowed euros is 5 percent annualized.
\bullet Interest rate on dollars loaned out is 6 percent annualized.
\bullet Spot rate is 1.10 euros per dollar (one euro = $0.909) .
\bullet Expected spot rate in five days is 1.15 euros per dollar.
\bullet Fabrizio Bank can borrow 10 million euros.
If Fabrizio Bank attempts to capitalize on the above information, its profit over the five-day period is


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