Question: One month after the events described in Problems 12 and 13, Casper Landsten once again has $1 million (or its Swiss franc equivalent) to invest

One month after the events described in Problems 12 and 13, Casper Landsten once again has $1 million (or its Swiss franc equivalent) to invest for three months. He now faces the following rates. Should he again enter into a covered interest arbitrage (CIA) investment?

Arbitrage funds available.....................$1,000,000

Spot exchange rate (SFr/$)........................1.3392

3-month forward rate (SFr/$).....................1.3286

U.S. dollar 3-month interest rate................4.750%

Swiss franc 3-month interest rate...............3.625%

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