Question
It is expected from the forward rate quotations that the Swiss franc will appreciate over the next 12 months. The transaction quotes are: Spot rate
It is expected from the forward rate quotations that the Swiss franc will appreciate over the next 12 months. The transaction quotes are:
Spot rate is $0.8200 per SF
One year Forward rate is $0.8300 per SF
U.S. annualized interest rate is 3.0% and
Swiss annualized interest rate is 2.4%.
Based on Interest Rate Parity, if you can borrow SF 1 million, what is your gain ir loss (rounded)?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77861671, 978-0077861674
