How do estimate the profits in percentage

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You expect that the Mexican peso will appreciate against the Australian dollar from its spot rate of A$0.2188 to A$0.2629 in one year. The following interbank lending and borrowing rates exist:

                                Lending Rate         Borrowing Rate

Australian dollar     7.78%                   8.79%
Mexican peso         8.16%                    9.30%

Problem 1: You have a borrowing capacity of either 2 million Australian dollars or 5 million Mexican pesos in the interbank market. Without using your own deposited fund, estimate the profits in percentage

Reference no: EM132675291

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