HSBC Banking corporation can borrow $ 5 million at 6% annualized. It can use the proceeds to invest in Canadian dollars at 9% annualized over 6 days period. The Canadian dollar worth $.95 and is expected to be worth $.94 in six days. Based on this information should HSBC banking borrow U.S. dollar and invest in Canadian dollar? What would be gain or loss in US dollar?
January 07, 2023
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HSBC Banking corporation can borrow $ 5 million at 6% annualized. It can use the proceeds to invest in Canadian dollars at 9% annualized over 6 days period. The Canadian dollar worth $.95 and is expected to be worth $.94 in six days. Based on this information should HSBC banking borrow U.S. dollar and invest in Canadian dollar? What would be gain or loss in US dollar?
Math
