Question: A U . S . bank converted ( $ 1 ) million to euros to make a euro loan to a customer

A U.S. bank converted \(\$ 1\) million to euros to make a euro loan to a customer when the exchange rate was 1.20 USD per euro. The borrower agreed to repay the principal plus 1.75 percent interest in one year. The borrower repaid euros at loan maturity and when the loan was repaid the exchange rate was 1.34 USD per euro. What was the bank's USD rate of return?
Multiple Choice
13.62\%
-10.62\%
\(9.75\%\)
10.62\%
\(-13.62\%\)
A U . S . bank converted \ ( \ $ 1 \ ) million to

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!