You are looking at the markets for THB (Thai bahts) and EUR. You observe that the bid/ask interest rates in Thailand are 20%/22%, and the bid/ask interest rates on the euro are 2%/4%. The spot exchange rate is 40.9 THB/EUR, and you expect that in the next 3 months (90 days) the exchange rate will not move much, moving to 41.3 THB/EUR.
Your borrowing capacity is 2 million EUR and 50 million THB.
Based on this information, you decide to borrow EUR at the relatively low rates, and invest in the higher THB rate. What will be your profit as measured in EUR?
Recently Asked Questions
- f 1.2 L of CO2 is collected when yeast is incubated with maltose for 8 minutes and the final temperature of the flask is 292.7 K, what is the milligrams of
- Please refer to the attachment to answer this question. This question was created from M2b Instructions for ER Team Project.
- how are the Jellinek curve and the disease model of addiction similar , is there a diffence that makes one a better tool?