You expect that the Mexican peso will depreciate against the Australian dollar from its spot rate...
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You expect that the Mexican peso will depreciate against the Australian dollar from its spot rate of A$0.2650 to A$0.2267 in one year. The following interbank lending and borrowing rates exist: Australian dollar Mexican peso Lending Rate 7.93% 8.09% Borrowing Rate 8.81% 9.20% You have a borrowing capacity of either 2 million Australian dollars or 4 million Mexican pesos in the interbank market. Without using your own deposited fund, estimate the profits in percentage. (enter 2 decimal places number with on sign or symbol) You expect that the Mexican peso will depreciate against the Australian dollar from its spot rate of A$0.2650 to A$0.2267 in one year. The following interbank lending and borrowing rates exist: Australian dollar Mexican peso Lending Rate 7.93% 8.09% Borrowing Rate 8.81% 9.20% You have a borrowing capacity of either 2 million Australian dollars or 4 million Mexican pesos in the interbank market. Without using your own deposited fund, estimate the profits in percentage. (enter 2 decimal places number with on sign or symbol)
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