Sun Bank USA has purchased a 16 million one-year Australian dollar loan that pay

Question

Sun Bank USA has purchased a 16 million one-year Australian dollar loan that pays 15 percent interest annually. The spot rate of U.S. dollars for Australian dollars is $0.6250/A$1. It has funded this loan by accepting a British pound (BP)–denominated deposit for the equivalent amount and maturity at an annual rate of 13 percent. The current spot rate of U.S. dollars for British pounds is $1.6000/£1.

a. What is the net interest income earned in dollars on this one-year transaction if the spot rate of U.S dollars for Australian dollars and U.S. dollars for BPs at the end of the year ae $0.5880 A$1 and $1.4500/E1, respectively? (Negative amount should be indicated by a minus sign.) Net interest income b. What should the spot rate of U.S. dollars for BPs be at the end of the year in order for the bank to eann b. What should the spot rate of u.S. dollars for BPs be at the end of the year in order for the bank to eam a net interest income of $250,000 (disregarding any change in principal values)? (Round your answer to 4 decimal places. (e.g., 32.1616)) Spot rate of U.S. dollars

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Sun Bank USA has purchased a 16 million one-year Australian dollar loan that pay

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