Jp Morgan Chase Bank Expects That The Mexican Peso Will Depreciate

JP Morgan Chase Bank expects that the Mexican peso will depreciate against the dollar from its sport rate of $. 15 to $. 14 in 10 days. The following interbank lending and borrowing rates exist: Lending Rate Borrowing RateU. S dollar 8. 0% 8. 3%Mexican peso 8. 5% 8. 7%Assume that JP Morgan Chase has a borrowing capacity of either $10 million or $70 million pesos in the interbank market, depending on which currency it wants to borrow. a) How could JP Morgan Chase attempt to capitalize on its expectations without using deposited funds? Estimate the profits that could be generated from this strategy?b) Assume all the preceding information with this exception: JP Morgan Chase expects the peso to appreciate from its present spot rate of $. 15 to $. 17 in 30 days. How could it attempt to capitalize on its expectations without using deposited funds? Estimate the profits that could be generated from this strategy?

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