Multiple Choice
An FI has a 1-year 8-percent US $160 million loan financed with a 1-year 7-percent UK ≤100 million CD. The current exchange rate is $1.60/≤.
-If the exchange rate remains the same, what is the dollar spread earned by the bank at the end of the year?
A) $750,000.
B) $1,000,000.
C) $1,250,000.
D) $1,600,000.
E) $1,750,000.
Correct Answer:
Verified
Correct Answer:
Verified
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