Bank of america believes the british pound will appreciate, Ask an Expert

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Bank of America believes the British pound will appreciate over the next five days from $1.65 to 1.8. The following annual interest rates apply: Currency Lending Rate Borrowing Rate Dollars 7.10% 7.50% British Pound (£) 6.80% 7.25% Bank of America can borrow either £5 million or $5million. If Bank of America’s forecast is correct, what will its dollar profit be from speculation over the five-day period?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92261151

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