Q1. Analytical Question: China Eastern, headquartered in Shanghai, needs US $5,000,000 for one year to finance working capital. The airline has two alternatives for borrowing: a. Borrow US$5,000,000 in eurodollars in London at 7.25% per annum. b. Borrow HK $39,000,000 in Hong Kong at 7.00% per annum, and exchange these Hong Kong dollars at the present exchange rate of HK$7.8/US$ for U.S. dollars. At what ending exchange rate would China Eastern be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars? Show your calculation and discuss.