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George is a US investor who wants to invest in French stock markets. Consider the following...

George is a US investor who wants to invest in French stock markets. Consider the following facts about France: Over the course of the next 180 days, there is a 40% chance that the Euro will lose 20% of its value relative to the US dollar and the French stock market will remain unchanged, and there is a 60% chance that the Euro will appreciate by 10% of its value relative to the US dollar and the French stock market will rise by 30%. Assume that James has no current assets or liabilities in France, but he can borrow USD 1 million at 3% p.a. Assuming a 360-day year, how much profits can George earn (or lose) by borrowing USD 1 million and investing in French stock markets for the next 180 days?

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