Question
The CFO of MM Co has two alternatives to invest Amount of investment $ Alternative A: to invest all the funds in 100,000 4.00%
The CFO of MM Co has two alternatives to invest Amount of investment $ Alternative A: to invest all the funds in 100,000 4.00% Swiss Francs per US$ a one year US Treasury bills offering Alternative B: to invest all the funds in a Swiss government considering the spot and forward currency exchange in the FX market. FX market shows you the following data a bond yield equivalent 1.45 US$ per Swiss Francs Quotes Spot one year CHF future Assuming the interest parity condition meet, find the 1-year bond equivalent yield for the Swiss government security 0.66 0.65
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