Question: Assume our bank issued a $50 million, one-year-maturity CD, denominated in British pounds. Later that day, the bank invested $25 million in a US Treasury

Assume our bank issued a $50 million, one-year-maturity CD, denominated in British pounds. Later that day, the bank invested $25 million in a US Treasury Bill and $25 million in a pound-denominated loan. The exchange rate on this date was 1.6489 pounds for $1. Assume no repayment of principal and that todays exchange rate is 1.7251 pounds for $1. a) What is the current value of the Euro CD principal in dollars and pounds? b) What is the current value of the British loan principal in dollars and pounds? c) What is the current value of the US Treasury Bill in dollars and pounds? d) What is the banks profit/loss from this transaction in dollars and pounds?

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