Question: Please show work. having a hard time understanding my professor - Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50%

Please show work. having a hard time understanding my professor

interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate:

0.50% in &1.1% in f - Investment Plan: o You use your

own funds: $100 o. You can borrow additional funds either 250 or

200 - Spotrates: - EUR/USD =1.2& GBP/USD =1.5 - Expectation: - USD

- Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50% in &1.1% in f - Investment Plan: o You use your own funds: $100 o. You can borrow additional funds either 250 or 200 - Spotrates: - EUR/USD =1.2& GBP/USD =1.5 - Expectation: - USD is expected to depreciate by 2.5% against EUR in 1 month. - USD is expected to appreciate by 1.5% against GBP in 1 month. Exchange rate in 1 month (1.8 points) a. EUR/USD= b. USD/EUR = c. GBP/USD= d. USD/GBP = e. GBP/EUR= f. EUR/GBP = 2. Cross rates (2 point) a. GBP (appreciates/depreciates) against EUR by b. EUR (appreciates/depreciates) against GBP by 3. Where to borrow? (1 point) So, it is cheaper to borrow from 4. Where to invest? (1point) 5. Today (2points) a. Change: $100to b. Borrow \& Convert: Borrow with borrowing rate and then change to c. Deposit: Deposit with Total deposit: 6. After 1 month (2points) a. Receive (or withdraw): b. Repayment: Total payment in Total payment in After payment in c Convert: - Given interest rates: - Deposit rate: 0.40% in &1.0% in - Borrow rate: 0.50% in &1.1% in f - Investment Plan: o You use your own funds: $100 o. You can borrow additional funds either 250 or 200 - Spotrates: - EUR/USD =1.2& GBP/USD =1.5 - Expectation: - USD is expected to depreciate by 2.5% against EUR in 1 month. - USD is expected to appreciate by 1.5% against GBP in 1 month. Exchange rate in 1 month (1.8 points) a. EUR/USD= b. USD/EUR = c. GBP/USD= d. USD/GBP = e. GBP/EUR= f. EUR/GBP = 2. Cross rates (2 point) a. GBP (appreciates/depreciates) against EUR by b. EUR (appreciates/depreciates) against GBP by 3. Where to borrow? (1 point) So, it is cheaper to borrow from 4. Where to invest? (1point) 5. Today (2points) a. Change: $100to b. Borrow \& Convert: Borrow with borrowing rate and then change to c. Deposit: Deposit with Total deposit: 6. After 1 month (2points) a. Receive (or withdraw): b. Repayment: Total payment in Total payment in After payment in c Convert

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