Assume that exchange rates of Swiss francs per dollar are 1.6 and 1.8 in the spot and one-year forward markets, respectively. Thus, an investor can transact for 1.6 francs per dollar today and contract to transact for 1.8 francs in one year. Assume that nominal interest rates are 10% in the U.S. and 12% in Switzerland. Demonstrate an arbitrage opportunity. That is, demonstrate how an investor can obtain an arbitrage profit by simultaneously using spot and forward markets to transact for securities and by borrowing and/or lending money. Further assume no transactions costs or barriers on transactions and that interest rates apply to both borrowing (short) and lending (long).