2. 21.2 Covered interest arbitrage The spot and one year forward rates on the Swiss franc are...
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2. 21.2 Covered interest arbitrage The spot and one year forward rates on the Swiss franc are SFr 2.1 and SFr 1.9, respectively. The risk-free interest rate in Australia is 3 per cent, and the risk-free rate in Switzerland is 1 per cent. Is there an arbitrage opportunity here? How would you exploit it?
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781743768051
8th Edition
Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan
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