Question
A US firm needing to borrow $200 million short term faces the following market information. The Spot rate for Swiss Francs is $.4968/SF, or SF2.0161/$
A US firm needing to borrow $200 million short term faces the following market information. The Spot rate for Swiss Francs is $.4968/SF, or SF2.0161/$ The Forward Rate for Swiss Francs is $.5024/SF, or SF1.9889/$ Swiss short-term rate is 7% US short term rate is 9.90%
In which market should it borrow and why?
What is the strategy?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
9th edition
1259722619, 978-1260049190, 1260049191, 978-1259722615
