Question
B. decreased; decreased.
C. increased; decreased
D. decreased; increased
E. decreased; stayed the same
A U.S. bank converted S1 million to Swiss francs to make a Swiss franc loan to a valued
3.
corporate customer when the exchange rate was 1.2 francs per dollar. The borower
agreed to repay the principal plus 5 percent interest in one year. The bomower repaid
Swiss francs at loan maturity and when the loan was repaid the exchange rate was 1.3.
francs per dollar. What was the bank's dollar rate of return?
A. 26.00 percent
B. -2.69 percent
C. 7.14 percent
D. -3.08 percent
E. 5.00 percent
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Transcribed Image Text:B. decreased; decreased. C. increased; decreased D. decreased; increased E. decreased; stayed the same A U.S. bank converted S1 million to Swiss francs to make a Swiss franc loan to a valued 3. corporate customer when the exchange rate was 1.2 francs per dollar. The borower agreed to repay the principal plus 5 percent interest in one year. The bomower repaid Swiss francs at loan maturity and when the loan was repaid the exchange rate was 1.3. francs per dollar. What was the bank's dollar rate of return? A. 26.00 percent B. -2.69 percent C. 7.14 percent D. -3.08 percent E. 5.00 percent
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