Computing exchange rates and interest rates


A Swiss bank converted 1.2 million Swiss francs to euros to make a euro loan to a customer when the exchange rate was 1.75 francs per euro. The borrower agreed to repay the principle plus 4% interest in 1 year. The borrower repaid euros at loan maturity and when the loan was repaid the exchange rate was 1.85 francs per EURO. What was the bank's franc rate of return?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Computing exchange rates and interest rates
Reference No:- TGS023909

Expected delivery within 24 Hours