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Interbank lending and borrowing rates

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You expect that the Mexican peso will depreciate against the Australian dollar from its spot rate of A$0.2595 to A$0.2282 in one year. The following interbank lending and borrowing rates exist:

Lending Rate Borrowing Rate

Australian dollar 7.91% 8.78%

Mexican peso 8.21% 9.49%

You have a borrowing capacity of either 2 million Australian dollars or 6 million Mexican pesos in the interbank market. Without using your own deposited fund, estimate the profits in percentage. (enter 2 decimal places number with on sign or symbol)

Reference no: EM133119361

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