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Casper Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has $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 million (or its Swiss franc equivalent) for a shortterm money market investment and wonders whether he should invest in U.S. dollars for three months or make a CIA investment in the Swiss franc. He faces the following quotes: Arbitrage funds available $1,000,000 Spot exchange rate (SFr/S) 1.2810 3-month forward rate (SFr/$) 1.2740 U.S. dollar 3-month interest rate | 4.800% Swiss franc 3-month interest rate | 3.200% Casper Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has $1 million (or its Swiss franc equivalent) for a shortterm money market investment and wonders whether he should invest in U.S. dollars for three months or make a CIA investment in the Swiss franc. He faces the following quotes: Arbitrage funds available $1,000,000 Spot exchange rate (SFr/S) 1.2810 3-month forward rate (SFr/$) 1.2740 U.S. dollar 3-month interest rate | 4.800% Swiss franc 3-month interest rate | 3.200%
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