US Bank has US$200 million worth of one year loans earing an average rate of Return of 4%. The bank has one year single payment Canadian dollar loans of C$110 million earning 6%. The banks funding source is $300 million in US$ one year CDs, on which they are paying 3%. Initially the exchange rate is C$1.10 per US$1. The one-year forward rate is C$1.14 per US$1. Calculate the bank's net interest

Answer rating: 100% (QA)

To calculate the banks net interest we need to determine the interest income and interest expense in ... View the full answer