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denis23 [38]
3 years ago
12

"The forward rate of the Swiss franc is $.50. The spot rate of the Swiss franc is $.48. The following interest rates exist:

Business
1 answer:
Zigmanuir [339]3 years ago
3 0

Answer:

Explanation:

1. Borrow SF 200,000 at a rate 5%, (SF200,000/1.05) = SF 190,476.

2. Convert SF 190,476 to USD at a spot $0.48

SF190,476 x $0.48 = $91,428

3. Invest $91,428 at 6% = $91,428 x1.06 = $96,914

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