8. (TCO D) AG Inc., based in Washington, exports products to an Italian firm and will receive payment of 100,000 in 3 months. On June 1, the spot rate of the euro was $1.40, and the 3-month forward rate was $1.42. On June 1, AG negotiated a forward contract with a bank to sell 100,000 forward in 3 months. The spot rate of the euro on September 1 is $1.45. AG will receive $_____ for the euros. (Points : 5)

$140,000 $142,000 $100,000 $145,000

Question 9.9. (TCO B) Assume the following information.

1-year deposit rate offered by U.S. banks = 12%.

1-year deposit rate offered on Swiss francs = 10%.

1-year forward rate of Swiss francs = $0.62.

Spot rate of Swiss franc = $0.60.

From the perspective of U.S. investors with $1,000,000, covered interest arbitrage would yield a rate of return of _____%. (

14.78 12.72 13.70 11.27