HSBC Bank believes the New Zealand dollar (NZS) will appreciate over the next 45 days...
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HSBC Bank believes the New Zealand dollar (NZS) will appreciate over the next 45 days from $0.72 to $0.76. The following annual interest rates apply 3 6 Currency Lending Rate Borrowing Rate Dollars 2.75% 3.25% New Zealand dollar (NZS) 2.85% 3.30% HSBC Bank has the capacity to borrow either NZ$8 million or $8 million. If HSBC Bank's forecast is correct, how shall HSBC Bank implement its speculating trading activities and what will its dollar profit be from speculation over the 45-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? (30/360 convention used for the interest calculation, ie, assuming 360 days a year) 9 12 HSBC Bank shall borrow $8 million Doing so, HSBC Bank will realize the profit of $440,472.22 15 HSBC Bank shall borrow $8 million Doing so, HSBC Bank will realize the profit of $442,027 78 18 HSBC Bank shall borrow NZ$8 million Doing so, HSBC Bank will realize the profit of $450.250.00 HSBC Bank shall borrow NZ$8 million Doing so, HSBC Bank will realize the profit of $412,666.67
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