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Use the following information to answer questions 9 and 10 Assume the following information: Spot rate today(14.3.2022) of Swiss franc $1.06 1-year forward rate as
Use the following information to answer questions 9 and 10
Assume the following information:
Spot rate today(14.3.2022) of Swiss franc $1.061-year forward rate as of today for Swiss franc$1.08Expected spot rate 1 year from now $1.09Rate on 1year deposits denominated in Swiss francs 7%Rate on 1year deposits denominated in U.S. dollars 5%
Assume the following information:
Spot rate today(14.3.2022) of Swiss franc $1.06
9.From the perspective of U.S. investors with $1,000,000 is there a chance for covered interest arbitrage?
10.Compare the rate of return of investing in the US and investing in Switzerland and determine where the US investor will choose to invest
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Fundamental Accounting Principles Volume II
Authors: Larson Kermit, Jensen Tilly
14th Canadian Edition
71051570, 0-07-105150-3, 978-0071051576, 978-0-07-10515, 978-1259066511
