You represent a US company which is negotiating a joint venture agreement with a Swiss partner. The

agreement would last for 20 years at the end of which the Swiss have agreed to sell their stake in the

joint venture to the US partner for 150 million Swiss francs. Just as he was leaving the meeting, the

representative of the Swiss company said: "If you would prefer the exit price to be fixed in US dollars,

please replace 150 million Swiss francs with 180 million US dollars before you sign the agreement." You

observe that at the current exchange rate a US dollar is worth 0.91 Swiss Francs, and are tempted to

accept this offer. In the evening, at a cocktail party, you find yourself seated next to an economist who

works in the research department of a large global bank, and you ask her about the likely movement of

the Swiss franc over the next 20 years. She deftly avoids giving a forecast, but does mention that her

bank expects inflation in the US to average 1% over the long term while the corresponding number for

Switzerland was -0.1%.

Based on only this information, what would you recommend to your boss? Show your workings.