James Clark is a currency trader with Wachovia. He notices the following quotes:

Spot exchange rate SFr$1\mathrm{.}2067/$$

Six$-$month forward exchange rate SFr$1\mathrm{.}1938/$$

Dollar interest rate $2\mathrm{.}50\%$ per year

Swiss franc interest rate $2\mathrm{.}00\%$ per year

a$.$ Is the interest rate parity holding? You may ignore transaction costs.

multiple choice

Yes

No