Practice problems for Module 2 1. Currency speculation: you are given following information Lending rate for $ is 8.0% and for peso is 8.5% Borrowing rate for $ is 8.3% and for peso is 8.7% Peso tends to appreciate against US$ from $.15 to $.17 in 30 days Your borrowing capacity is $10 million or 70 million pesos. a. What is the interest rate on your loan? b. After currency conversion, how much should be deposited or lent? c. After 30 days, how much is the expected cash inflow? d. After 30 days, how much is the expected cash outflow? e. After 30 days, how much is the expected profit