Assume the following information regarding U.S.and European annualized interest rates:
Milly Bank can borrow either $20 million or €20 million.The current spot rate of the euro is $1.13.Furthermore,Milly Bank expects the spot rate of the euro to be $1.10 in 90 days.What is Milly Bank's dollar profit from speculating if the spot rate of the euro is indeed $1.10 in 90 days
A) $579,845.
B) $583,800.
C) $588,200.
D) $584,245.
E) $980,245.
Correct Answer:
Verified
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