Question: 2. Given a spot exchange rate quote for USD/CHF at 1.6627 and a 6-month forward quote for USD/CHF at 1.6558, and 6-month interest rates for

2. Given a spot exchange rate quote for USD/CHF at 1.6627 and a 6-month forward quote for USD/CHF at 1.6558, and 6-month interest rates for USD at 3.5%/year and for CHF at 3.0%/year, is interest rate parity holding? If there is an arbitrage opportunity, what steps would be needed to execute the trade, and what would be the expected profit given $1M notional?

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