Question: annualized nominal interest rate is 5 . 5 % in the U . S . and 2 % in Switzerland. Is covered interest arbitrage possible?

annualized nominal interest rate is

5.5 %

in the U

.

.

and

2 %

in Switzerland. Is covered interest arbitrage possible? If it is possible, describe the steps you would take to conduct it and calculate the arbitrage profit if you can borrow $

552, 250

500, 000 C H F .

If you only show calculations, you will not receive full credit.

annualized nominal interest rate is 5.5% in the U.S. and 2%

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