Question: Econo Meet doc.p E Globa Parap Log In QUES 6 er%206.PDF New Tab Rr Rebranding: The Ro... (15) Facebook shidafzan: Financial... 3 / 3 100%

Econo Meet doc.p E Globa Parap Log In QUES 6 er%206.PDF

Econo Meet doc.p E Globa Parap Log In QUES 6 er%206.PDF New Tab Rr Rebranding: The Ro... (15) Facebook shidafzan: Financial... 3 / 3 100% + B QUESTION 36 (20 marks) Blue Diamond Bank expects that the Chinese currency (the yuan) will depreciate against the dollar from its spot rate of $0.15 to $0.13 in 90 days. The following interbank lending and borrowing rates exists: U.S. dollar Chinese yuan Lending Rate 8.09 8.598 Borrowing Rate 9.09 9.6% Assume that Blue Diamond Bank has n borrowing capacity of either $10 million or 70 million youn in the interbank market, depending on the currency it wishes to borrow, Assume n 360 day year allow could Blue Diamond Bank attempt to capitalize on its expectations without using deposited funds? Estimate the profit that could be generated from this strategy (10 Marks) b. In Blue Diamond Rank expects the yuanto appreciate from its present spot rate of $0.15 to $0.17 in 90 days, how could it capitalize on its expectations without using deposit Hands? Estimate the profits that could be generated from this strategy (10 Marks) Question 37 (20 marks) Econo Meet doc.p E Globa Parap Log In QUES 6 er%206.PDF New Tab Rr Rebranding: The Ro... (15) Facebook shidafzan: Financial... 3 / 3 100% + B QUESTION 36 (20 marks) Blue Diamond Bank expects that the Chinese currency (the yuan) will depreciate against the dollar from its spot rate of $0.15 to $0.13 in 90 days. The following interbank lending and borrowing rates exists: U.S. dollar Chinese yuan Lending Rate 8.09 8.598 Borrowing Rate 9.09 9.6% Assume that Blue Diamond Bank has n borrowing capacity of either $10 million or 70 million youn in the interbank market, depending on the currency it wishes to borrow, Assume n 360 day year allow could Blue Diamond Bank attempt to capitalize on its expectations without using deposited funds? Estimate the profit that could be generated from this strategy (10 Marks) b. In Blue Diamond Rank expects the yuanto appreciate from its present spot rate of $0.15 to $0.17 in 90 days, how could it capitalize on its expectations without using deposit Hands? Estimate the profits that could be generated from this strategy (10 Marks) Question 37 (20 marks)

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