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Assume the spot exchange rate for the Swiss franc is CHF0.90 = USD1 and the 1-year forward rate is CHF0.871 = USD1. If the 1-year

Assume the spot exchange rate for the Swiss franc is CHF0.90 = USD1 and the 1-year forward rate is CHF0.871 = USD1. If the 1-year interest rate in the US is 5%, what Is the 1-yeasr interest rate in Switzerland?

1. 2.00% 2. 1.62% 3. 1.50% 4. 1.33%

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