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Casper Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has $1.1 million (or its Swiss franc equivalent)
Casper Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has $1.1 million (or its Swiss franc equivalent) for a short term money market investment and wonders if he should invest in U.S. dollars for three months, or make a CIA investment in the Swiss franc. He faces the following quotes: 1,100,000 Arbitrage funds available Spot exchange rate (SFr/S) 3-month forward rate (SFr/S) U.S. Dollar annual interest rate Swiss franc annual interest rate 1.2806 1.2744 4.801 % 3.204 % The CIA profit potential is 94, which tells Casper Landsten he should borrow to earn covered interest arbitrage (CIA) profits. (Round to three decimal places and select from the drop-down menus.) Vyielding currency, the in order , The CIA profit amount is $L. (Round to the nearest cent.)
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