Question

You plan to execute a carry trade. Assume you can borrow 1 million yen at 1%....

You plan to execute a carry trade. Assume you can borrow 1 million yen at 1%. You can exchange the yen for South African Rand at a rate of 2 rand per yen. You can earn 7% on your rand investment. If the exchange rate stays constant over the year, what is your profit in yen?

Group of answer choices

60,000

10,000

130,000

140,000

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