Jason Smith is a currency trader.He has $10 million (or its Swiss franc equivalent) for a short-term money market investment. He faces the following quotes:

Arbitrage funds available$10,000,000

Spot exchange rate (SFr./$)1.1050

3-month forward rate (SFr./$)1.0575

U.S. dollar 3-month interest rate5.800% p.a.

Swiss franc 3-month interest rate4.100% p.a.

Make a recommendation if he should invest in U.S. dollars for three months, or make a covered interest arbitrage investment in the Swiss franc. Show the steps and arbitrage profits payoffs.Lack of detailed explanations behind your answers will lead to losses of points