Question
Assume the following Spot rate today of Swiss franc $0.60 1-year forward rate as of today for Swiss franc $0.65 Expected spot rate 1 year
Assume the following
| Spot rate today of Swiss franc | $0.60 |
| 1-year forward rate as of today for Swiss franc | $0.65 |
| Expected spot rate 1 year from now | $0.64 |
| Rate on 1-year deposits denominated in Swiss francs | .07 |
| Rate on 1-year deposits denominated in U.S. dollars | .09 |
From the perspective of U.S. investors with $1,100,000, covered interest arbitrage would yield a rate of return of?
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Global Finance And Development
Authors: David Hudson
1st Edition
0415436354, 978-0415436359
