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

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

  • Spot rate: $0.5/NZ$
  • Expectation: ZN$ will appreciate depreciate 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)

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