Question: Using the following information, your maximum profits (positive) would be $____. Spot rate: $0.5/NZ$ Expectation: ZN$ will appreciate against $ by 6% You can borrow

Using the following information, your maximum profits (positive) would be $____.

Spot rate: $0.5/NZ$ Expectation: ZN$ will appreciate against $ by 6% You can borrow either $5,000 or NZ$10,000 Given interest rates:

Lending rate Borrowing rate

US$ 6.8% (APR) 7.1%(APR)

NZ$ 6.6%(APR) 6.9%(APR)

a. $396 b. $301 c. $198 d. $332

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