Use the information in the table below to answer this question. Assume the expected exchange rates in one year are correct. KC Bank is headquartered in Canada and borrows one million Canadian dollars at six percent in Canada for one year from RR Bank. KC Bank immediately converts the Canadian dollars into euros and lends out the euros at five percent to AB Bank in Germany for one year. At the end of one year, KC Bank pays off the loan to RR Bank and collects on the loan to AB Bank. What will be KC Banks profit (or loss) in Canadian dollars at the end of the year? Explain your answer.

1. KC Bank is extremely confident on the expected exchange rates in one year. 2. KC Bank can borrow and lend at the one-year interbank interest rates. 3. KC Bank is limited to borrowing one million units of currency of another country