Annual interest rates apply

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Reference no: EM132032038

Diskcard Inc. believes the Canadian dollar will depreciate over the next 3 days from $1.36 to $1.16. The following annual interest rates apply:

Currency Lending Rate Borrowing Rate

Canadian Dollars (C$) .0520 .0580

Dollars 0.044 .0595

Diskcard Inc. has the capacity to borrow either Canadian $100,000,000 or US $75,000,000. If Diskcard Inc. 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)?

Reference no: EM132032038

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