Question
casper Landsten once again has $0.9 million (or its swiss franc equvalent) to invest for three months. He now faces the following rates. Should he
casper Landsten once again has $0.9 million (or its swiss franc equvalent) to invest for three months. He now faces the following rates. Should he enter into a covered interest arbitrage (CIA) investment?
Arbitrage Funds Available $900,000
Spot Exchange Rate 1.3399
3-moth forward rate 1.3287
US $ annual interest Rate 4.748%
Swiss Franc annual interest rate 3.625%
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Analysis for Financial Management
Authors: Robert C. Higgins
10th edition
007803468X, 978-0078034688
