Problem: Assume the following information regarding U.S. and European annualized interest rates:
Currency Lending rate Borrowing rate
USD 2.5% 5.1%
EUR 4.6% 6.1%
Trensor Bank can borrow either $16 million or the euro equivalent. The current spot EUR/USD rate is 1.1575. Furthermore, Trensor Bank expects the spot rate of the euro to be 1.1364 in 90 days. What is Trensor Bank's dollar profit from speculating if the spot rate of the euro is indeed 1.1364 in 90 days? (USD, no cents)