7. Casper Landsten is a foreign exchange trader for a bank in New York. He has $5 million (or its Swiss franc equivalent) for a short term money market investment and wonders if he should invest in U.S. dollars for three months, or make a covered interest arbitrage investment in the Swiss franc. Can he make profit if he faces the following quotes? Assumptions Arbitrage funds available Spot exchange rate (SFr./$) Value $7,000,000 1.2750 SFr. Equivalent SFr. 6,375,000 3-month forward rate (SFr./$) U.S. dollar 3-month interest rate Swiss franc3-month interest rate 1.2634 5.200% 3.700%