Assume that 90-day U.S. securities have a 4.5% annualized interest rate whereas 90-day Swiss securities have a

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Assume that 90-day U.S. securities have a 4.5% annualized interest rate whereas 90-day Swiss securities have a 5% annualized interest rate. In the spot market, 1 U.S. dollar can be exchanged for 1.2 Swiss francs. If interest rate parity holds, what is the 90-day forward rate exchange between U.S. dollars and Swiss francs? (0.8323 $ per SFr or 1.2015 SFr per $)

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Intermediate Financial Management

ISBN: 9781337395083

13th Edition

Authors: Eugene F. Brigham, Phillip R. Daves

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