Question: In early 2012, the spot exchange rate between the Swiss Franc and U.S. dollar was 1.0404 ($ per franc). Interest rates in the U.S. and

In early 2012, the spot between the Swiss Franc and U.S. dollar was 1.0404 ($ per franc). Interest rates in the U.S. and Switzerland were 0.25% and 0% per annum, respectively, with continuous compounding. The three-month forward was1.0300 ($ per franc). What arbitrage strategy was possible? How does your answer change if the is 1.0500 ($ per franc).

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