Question
Casper Landsten once again has $1.1 million (or its Swiss franc equivalent) to invest for three months. He now faces the following rates. Should he
Casper Landsten once again has $1.1 million (or its Swiss franc equivalent) to invest for three months. He now faces the following rates. Should he enter into a covered interest arbitrage (CIA) investment? Arbitrage funds available $ 1,100,000 Spot exchange rate (SFr/$) 1.3396 3-month forward rate (SFr/$) 1.3287 U.S. Dollar annual interest rate 4.746 % Swiss franc annual interest rate 3.621 %.
The CIA profit amount is $?
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Finance For Growing Enterprises
Authors: Edward W. Davis, Roger Buckland
1st Edition
1138679941, 978-1138679948
