MSU Bank believes the New Zealand dollar will appreciate over the next 6 months from NZD1.406/USD (current) to NZD1.355/

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answerhappygod
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MSU Bank believes the New Zealand dollar will appreciate over the next 6 months from NZD1.406/USD (current) to NZD1.355/

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MSU Bank believes the New Zealand dollar will appreciate overthe next 6 months from NZD1.406/USD (current) to NZD1.355/USD (in 6months). The following 6-month interest rates apply: (the rates are periodic rates so you do not need to adjust them atall – we do not need to multiply by 180/360 or anything likethat)
Currency Lending(deposit) Rate Borrowing Rate
Dollars 2.00% 2.25%
NewZealand dollar(NZ$) 2.55% 2.75%
MSU Bank has the capacity to borroweither NZ$10 million or $6 million. If MSU Bank’s forecast ifcorrect, what will its U.S. dollar profit be fromspeculation over the 6-month period?
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