Assume the following information regarding U.S. and European annualized interest rates: Currency Lending Rate Borrowing...
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Finance
Assume the following information regarding U.S. and European annualized interest rates:
Currency Lending Rate Borrowing Rate
U.S. Dollar ($) 0.0674 .072
Euro () .068 0.0728
American Bank can borrow either $20,400,000million or 20,400,000 million. The current spot rate of the euro is $1.13. Furthermore, American Bank expects the spot rate of the euro to be $1.10 in 90 days. What is American Banks dollar profit from speculating if the spot rate of the euro is indeed $1.10 in 90 days?
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