Currency would substantially depreciate

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Reference no: EM131855716

You knew in your gut that new britain would vote to leave the EU. You also knew that the currency would substantially depreciate and you wanted to capitalize on this knowledge. Given the following information what will your dollar profit be from speculation over a 30 day period?

currency lending rate borrowing rate

dollars 7.10% 7.50%

pound 6.80% 7.25%

On june 23rd the spot rate was $1.49 and 30 days later it was trading at !1.31. On june 22nd you can either borrow 100,000 pounds or $149,000.

Reference no: EM131855716

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