In early 2012, the spot exchange rate between the Swiss Franc and U.S. dollar was 1.0404 ($

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In early 2012, the spot exchange rate between the Swiss Franc and U.S. dollar was 1.0404

($ per franc). Interest rates in the United States and Switzerland were 0.25% and 0% per annum, respectively, with continuous compounding. The three-month forward exchange rate was 1.0300 ($ per franc). What arbitrage strategy was possible? How does your answer change if the forward exchange rate is 1.0500 ($ per franc).

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