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Question
A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate customer when the exchange rate was 1.2 francs per dollar. The borrower agreed to repay the principle plus 5% interest in 1 year. The borrower 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%
B. -2.69%
C. 7.14%
D. -3.08%
E. 5.00%
Answer
This answer is hidden. It contains 49 characters.
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