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The interest rate is in U.S. is 5%, per year, whereas the interest rate in Switzerland is 2%, per year. Current spot rate CHF0.96/$ and
The interest rate is in U.S. is 5%, per year, whereas the interest rate in Switzerland is 2%, per year. Current spot rate CHF0.96/$ and you expect that the exchange rate will remain the same. Given that your expectation comes true, how much uncovered interest arbitrage profit you would make on either $1,000,000 or its equivalent of CHF960,000?
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