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Baylor Bank believes the Canadian dollar will depreciate over the next 3 days from $1.40 to $1.03. The following annual interest rates apply:
Currency Lending Rate Borrowing Rate
Canadian Dollars (C$) .0520 .0580
Dollars 0.061 .0595
Baylor Bank has the capacity to borrow either Canadian $102,800,000 or US $75,000,000. If Baylor Bank's forecast is correct, what will its dollar profit be from speculation over the 3 day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? 38,057,982
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