Question
Casper Landsten-Thirty Days Later. Casper Landsten once again has $0.95 million (or its Swiss franc equivalent) to invest for three months. He now faces the
Casper Landsten-Thirty Days Later. Casper Landsten once again has $0.95 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?
The CIA profit amount in USD is? (Round to nearest cent)
Arbitrage funds available | $ | 950,000 |
|
Spot exchange rate (SFr/$) |
| 1.3397 |
|
3-month forward rate (SFr/$) |
| 1.3283 |
|
U.S. Dollar annual interest rate |
| 4.753 | % |
Swiss franc annual interest rate |
| 3.627 | % |
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