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--- Citi Bank believes British pounds () will depreciate over the next 180 days from...

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--- Citi Bank believes British pounds () will depreciate over the next 180 days from $1.39 to $1.36. The following annual interest rates apply: Currency Dollars British pounds () Lending Rate 2.15% 2.80% Borrowing Rate 2.20% 2.85% Citi Bank has the capacity to borrow either 25 million or $25 million. If Citi Bank's forecast is correct, how shall Citi Bank implement its speculating trading activities and what will its dollar profit be from speculation over the 180-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? (30/360 convention used for the interest calculation, i.e., assuming 360 days a year) Citi Bank shall borrow $25 million. Doing so, Citi Bank will have the speculative profit of $472,122.30. Citi Bank shall borrow 25 million. Doing so, Citi Bank will have the speculative profit of $639,062.50. Citi Bank shall borrow 25 million Doing so, Citi Bank will have the speculative profit of $656,250.00 Citi Bank shall borrow $25 million Doing so, Citi Bank will have the speculative profit of $459.757 19. O

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