Assume the following information: US investors have $1,000.000 to invest: 1-YEAR DEPOSIT RATE OFFERED BY uU.S. banks = 10%, 1-year deposite rate offered on British pounds = 13.5% 1-year forward rate of Swiss francs =$1.26 Spot rate of Swiss Franc = $1.30 Given this information Interest rate parity doesnt exit and covered interest arbitrage b U.S. investors results in a yield above what is possible domestically. Interest rate parity exists and covered interest arbitrage by U.S. investestors results in the the same yield as investing domestically. Interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in a yield below what is possible domestically. Interest rate parity exists and covered interest arbitrage by Us. invesgtors results in a yield above what is possible domestically.