Bank of America (USA) believes that New Zealand $ will appreciate over the next 90 days from $0.48/NZ$ to $0.50/NZ$. The following annual interest rate can be applied: Currency US dollar NZ$ Lending rate (Annual) Borrowing rate(Annual) 7.10% 7.50% 6.80% 7.25% BOA has, the capacity to borrow $5million from Chase Bank. If BOA's forecast is correct, what would be BOA's US$ profit from this FX speculation over the 90 day period? O $0.207 million $5.093 million $5.3 million $0.556 million

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Bank of America (USA) believes that New Zealand $ will appreciate over the next 90 days from $0.48/NZ$ to $0.50/NZ$. The following annual interest rate can be
applied:
Currency
US dollar
NZ$
Lending rate (Annual)
Borrowing rate(Annual)
7.10%
7.50%
6.80%
7.25%
BOA has, the capacity to borrow $5million from Chase Bank. If BOA's forecast is correct, what would be BOA's US$ profit from this FX speculation over the 90 day
period?
O $0.207 million
$5.093 million
$5.3 million
$0.556 million
Transcribed Image Text:Bank of America (USA) believes that New Zealand $ will appreciate over the next 90 days from $0.48/NZ$ to $0.50/NZ$. The following annual interest rate can be applied: Currency US dollar NZ$ Lending rate (Annual) Borrowing rate(Annual) 7.10% 7.50% 6.80% 7.25% BOA has, the capacity to borrow $5million from Chase Bank. If BOA's forecast is correct, what would be BOA's US$ profit from this FX speculation over the 90 day period? O $0.207 million $5.093 million $5.3 million $0.556 million
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