Question
It is expected from the forward rate quotations that the Swiss franc will appreciate over the next 12 months. The bid-ask and other transaction quotes
It is expected from the forward rate quotations that the Swiss franc will appreciate over the next 12 months. The bid-ask and other transaction quotes are:
Spot rate is $0.9200 - $0.9300 perSF;
12 month Forward rate is $0.9370 - $0.9460 per SF;
U.S. annualized interest rate is 3.2%-3.4% and
Swiss annualized interest rate is 2.4% - 2.6%.
Based on Interest Rate Parity, if you can borrow SF 100,000, what is your gain or loss (rounded)?
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Multinational Business Finance
Authors: David Eiteman, Arthur Stonehill, Michael Moffett
15th Global Edition
129227008X, 9781292270081
