Question

Three months ago, Bank X issued an $ 80 million, one-year maturity CD denominated in euros. On the same date, $ 40 million was invested in a euro-denominated loan and $ 20 million in a U.S. T-bill. The exchange rate on this date was 0.77euros/$. Assume no repayment of principal and an exchange rate today of 0.74euros/$. What is the current value of the euro-denominated loan principal (in euros and dollars)?
1. What is the current value of the CD principal ?
2. What is the current value of the euro-denominated loan principal (in euros and dollars)? 



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  • CreatedAugust 26, 2013
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