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Suppose an investor has $2,000,000 and can choose to invest in U.S. securities for one year or make a covered interest arbitrage investment in the

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Suppose an investor has $2,000,000 and can choose to invest in U.S. securities for one year or make a covered interest arbitrage investment in the Swiss franc. She faces the following rates Spot exchange rate 12-month forward rate CHF1.1472/$ 12-month U.S. interest rate 4.5%) per annum 12-month Swiss interest rate 3.2% per annum Which is the better investment? Explain why CHF1.1520/S

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