Question: Assume: ( 1 ) the U . S . annual interest rate = 1 0 % ; ( 2 ) the Swiss annual interest rate

Assume: (1) the U.S. annual interest rate =10%; (2) the Swiss annual interest rate =4%;
and (3) the 90-day forward rate for the CHF = $.3864. At what current spot rate will
interest rate parity (IRP) hold?

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