Question: 11] Compaq Computer has a SF 1 million payable in 30 days. Suppose Compaq can borrow in U.S. at 0.7% and invest in Switzerland at

11]

Compaq Computer has a SF 1 million payable in 30 days. Suppose Compaq can borrow in U.S. at 0.7% and invest in Switzerland at 0.5% for 30 days. How could Compaq hedge this payable using a money market hedge? Assume the francs spot rate is $ 0.65.

Group of answer choices

Borrow $993,048 from a U.S. bank today

Borrow SF 995,025 from a Swiss bank today

Borrow SF 1,000,000 today

None of the choices is correct

Borrow $646,766 from a U.S. bank today

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