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businessfinancefinance questions and answers7. east bank has purchased a 5 million one-year swiss franc (sf) loan that pays 6 percent interest annually. the spot rate of u.s. dollars for swiss francs (chf/usd) is 1.0175. it has funded this loan by accepting a canadian dollar (c\$)-denominated deposit for the equivalent amount and maturity at an annual rate of 4 percent. the current spot rate of u.s.
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Question: 7. East Bank Has Purchased A 5 Million One-Year Swiss Franc (Sf) Loan That Pays 6 Percent Interest Annually. The Spot Rate Of U.S. Dollars For Swiss Francs (CHF/USD) Is 1.0175. It Has Funded This Loan By Accepting A Canadian Dollar (C\$)-Denominated Deposit For The Equivalent Amount And Maturity At An Annual Rate Of 4 Percent. The Current Spot Rate Of U.S.
7. East Bank has purchased a 5 million one-year Swiss franc (Sf) loan that pays 6 percent interest annually. The spot rate of
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7. East Bank has purchased a 5 million one-year Swiss franc (Sf) loan that pays 6 percent interest annually. The spot rate of U.S. dollars for Swiss francs (CHF/USD) is 1.0175. It has funded this loan by accepting a Canadian dollar (C\$)-denominated deposit for the equivalent amount and maturity at an annual rate of 4 percent. The current spot rate of U.S. dollars for Canadian dollars (CAD/USD) is 0.8622 a. What is the net interest income earned in dollars on this one-year transaction if the spot rate of U.S. dollars for Sfs and U.S. dollars for CS s at the end of the year are 1.0310 and 0.7680, respectively? b. What should the spot rate of U.S. dollars for C$ s be in order for the bank to earn a net interest income of $108,000 (disregarding any change in principal values)?