American Terms	European Terms
AUD	.9035	1.1068
1-month forward	.9018	1.1089
3-month forward	.8981	1.1134
6-month forward	.8926	1.1203
CHF	1.1050	.9050
1-month forward	1.1252	.8887
3-month forward	1.1258	.8882
6-month forward	1.1268	.8875

1. Identify the currency/currencies whose value is expected to depreciate against CHF over time.

2.Calculate the forward discount or premium at which USD is trading against AUD for a 6-month delivery.

3. A U.S. portfolio manager would like to invest $10,000,000 as a 6-month deposit. The 6-month interest rate is 2.5% per annum on $ deposit and 4% per annum on AUD deposit. How should the money be invested? Explain

4. For a CHF based investor facing 3-month $ interest rate of 8% and 3-month CHF interest rate of 4% per annum, specify the arbitrage process he can take to earn guaranteed profit. Discuss the impact of arbitrage on CHF interest rate, the price of CHF in the spot market, and the price of USD in the forward-market.