Current spot rate of CHF = $0.6543; Current 1-year forward rate for CHF = $0.6808; 1-year interest rate in the U.S. = 3.5%; 1-year interest rate in the Switzerland = 7.5%. If the spot rate of SF one year latter turn out to be $0.6400 then uncovered rate of return from the Swiss point of view would be: Group of answer choices 5.81% 5.15% 1.24% 9.90%
Current spot rate of CHF = $0.6543; Current 1-year forward rate for CHF = $0.6808; 1-year interest rate in the U.S. = 3.5%; 1-year interest rate in the Switzerland = 7.5%. If the spot rate of SF one year latter turn out to be $0.6400 then uncovered rate of return from the Swiss point of view would be: Group of answer choices 5.81% 5.15% 1.24% 9.90%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 77.
Transcribed Image Text:Current spot rate of CHF = $0.6543; Current 1-year forward rate for CHF = $0.6808; 1-year interest rate in the U.S. = 3.5%; 1-year interest
rate in the Switzerland = 7.5%. If the spot rate of SF one year latter turn out to be $0.6400 then uncovered rate of return from the Swiss
point of view would be:
Group of answer choices
5.81%
5.15%
1.24%
9.90%
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