Assume an FI Sells A$100 Million for US Dollars on the Spot

Multiple Choice

Assume an FI sells A$100 million for US dollars on the spot currency markets at an exchange rate of A$1.20 to US$1.00 and invests the US dollar assets at an interest rate of 12 per cent for one year. What is the value of the US dollar assets at the end of the year (round to two decimals) ?

A) US$134 400.00 million
B) US$22 400.00 million
C) US$93 333.33 million
D) US$560 000.00 million