# Diamond Bank Case Study

631 Words 3 Pages
Register to read the introduction… Estimate the profits (or losses) that could be earned from this strategy. Should Diamond Bank pursue this …show more content…
\$:
S\$10,000,000 * \$.43/C\$ = \$4,300,000 (3) Invest the \$ at annual rate of 7.0% for 60 days:
\$4,300,000 (1 + 7.0% * 60 / 360) = \$4,350,166.67 (4) Convert U.S. \$ back to S\$ in 60 days:
\$4,350, 166.67 / \$.42/S\$ = S\$10,357,539.68 (5) Repay the S\$ borrowed:
S\$10,000,000 * (1 + 24.0% * 60 / 360) = S\$10,400,000 (6) Loss = S\$10,357,539.68 – S\$10,400,000 = – S\$42,460.32
Thus, the losses that could be earned from this strategy are S\$42,460.32. And Diamond Bank should not pursue this strategy.

29. (Similar in spirit to question 29) Movements in cross Exchange Rates: Last year the euro trade at \$1.32/€ and Kuwaiti dinar trade at \$4.32/KWD. Today the euro trade at \$1.438/€ and Kuwaiti dinar trade at \$3.67/KWD. By what percentage did the cross exchange of the Kuwaiti dinar in European euro (i.e., € /KWD) change over the last year.
Last year: \$4.32/KWD / \$1.32/€ = €3.2727/KWD
Today: \$3.67/KWD \$1.438/€ = €2.5522/KWD
Percentage change = (St – St-1) / St-1
= (€2.5522/KWD – €3.2727/KWD) / €3.2727/KWD = – 0.2201
= – 22.01%
Thus, the cross exchange of the Kuwaiti dinar in European euro change over the last year is –

## Related Documents

• ###### Manias Panics And Crashes Chapter Summary

Crashes.” The book is written about the financial crisis happened since 1636 (The famous Tulipomania) to 2005 including 2001 IT Bubble and this book is a very good bedside book for all finance and investment professionals. Content of the Book The book is separated into 13 Chapters. Chapter 1 gave a summary of the whole book and mentioned the cases of the financial crisis happened in the history. (a) The Dutch Tulip Bulb Bubble 1636, (b) The South Sea Bubble 1720, (c)…

Words: 683 - Pages: 3
• ###### Guidelines Related To Project Report On Viva-Voci

paper 3.5. • Marking Scheme for Project Report and Viva-Voce Examination: Project Report (50 marks) Chapter 1: Introduction – 10 marks Chapter 2: Conceptual Framework/ National/International Scenario – 5 marks Chapter 3: Presentation, Analysis & Findings -- 25 marks Chapter 4: Conclusion & Recommendations -- 10 marks Viva-Voce (50 marks) In course of Viva-Voce Examination…

Words: 1565 - Pages: 7
• ###### Case Analysis Of TESCO

Percentage pay-out ratio Policy……………………………………..Page 3 2.1.2. ZERO Dividend Payment Policy …………………………………………..Page 3 2.1.3. Constant or Steadily Increasing Dividend Policy………………………….Page 3 2.2. Dividend Policies in Practice………………………………………………….Page 4 2.3. Effect of Dividend Policy on Shareholder Wealth…………………………..Page 5 3. CONCLUSION…………………………………………………………………..Page 5 Reference………………………………………………………………………...Page 6 Bibliography…………………………………………………………………..…Page 7…

Words: 1807 - Pages: 8