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Please provide step by step solution for these problems Please answer the next 5 questions based on the following information. Please use the approximate formula
Please provide step by step solution for these problems Please answer the next 5 questions based on the following information. Please use the approximate formula to answer all questions. Current spot rate of SF exact, not the $0.6543; Current 1-year forward rate for SF $0.6808; 1-year interest rate in the U.S. = 3.5%; 1-year interest rate in the Switzerland-7.5% 25. If the spot rate of SF one year latter is S0.6925, then uncovered rate of return from the US point of view would be: a. 4.04% b. 9.54% C. 11.85% d. 13.78% 26. If you borrowed in $5,000,000 and invested in SF, and the spot rate of SF one year latter turned out to be S0.6925, then your profit/loss from the uncovered transaction at the end of the year would be: a. $200,000 b. $375,000 c. $417,694 d. $513,809
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