Question

Six months ago, Qualitybank issued a $126 million, one-year-maturity CD, denominated in British pounds (Euro CD). On the same date, $73 million was invested in a £-denominated loan and $53 million in a U.S. Treasury bill. The exchange rate on this date was £1.5382 for $1. If you assume no repayment of principal and if today’s exchange rate is £1.1905 for $1:

a.	What is the current value of the Euro CD principal in dollars and pounds? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 2 decimal places. (e.g., 32.16))

Euro CD principal in pounds	£
Euro CD principal in dollars	$

b.	What is the current value of the British loan principal in dollars and pounds? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 2 decimal places. (e.g., 32.16))

British loan principal in pounds	£
British loan principal in dollars	$

c.	What is the current value of the U.S. Treasury bill in dollars and pounds? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 2 decimal places. (e.g., 32.16))

U.S. Treasury bill in pounds	£
U.S. Treasury bill in dollars	$

d.	What is Qualitybank’s profit/loss from this transaction in dollars and pounds? (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers in millions. Round your answers to 2 decimal places. (e.g., 32.16))

Qualitybank’s (Click to select)profitloss in pounds	£
Qualitybank’s (Click to select)profitloss in dollars	$

Answer 1