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The next two questions refer to the following. Suppose the yen-pound exchange rate is currently 1 = 300.

The next two questions refer to the following.

Suppose the yen-pound exchange rate is currently £1 = ¥300.  A Japanese bank borrows £2 million from UK lenders for 1 year at 6% interest, and lends ¥600 million to Japanese borrowers for 1 year at 8% interest. 


1.    The bank's expected net gain is

a)    ¥40,000

b)   ¥48,000

c)    ¥360,000

d)   ¥12,000,000

e)    ¥24,000,000

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