Question: You live in Switzerland and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online:

You live in Switzerland and want to try to make some money

You live in Switzerland and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid Ask Spot exchange rate CHF 1.1247/EUR CHF 1.1290/EUR 150-day Forward exchange rate CHF 1.1918/EURCHF 1.1972/EUR 150-day EUR interest rate 8.48% p.a. 8.74% p.a. 150-day CHF interest rate 11.56% p.a. 11.90% p.a. What will your profit (in CHF) be 150 days from now if you borrow CHF7 million and invest in France then convert back to the Swiss franc? a. CHF 303,379 O b. CHF 304,370 . CHF 362,074 O d. CHF 287,393 e. CHF 321,301 You live in Switzerland and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid Ask Spot exchange rate CHF 1.1247/EUR CHF 1.1290/EUR 150-day Forward exchange rate CHF 1.1918/EURCHF 1.1972/EUR 150-day EUR interest rate 8.48% p.a. 8.74% p.a. 150-day CHF interest rate 11.56% p.a. 11.90% p.a. What will your profit (in CHF) be 150 days from now if you borrow CHF7 million and invest in France then convert back to the Swiss franc? a. CHF 303,379 O b. CHF 304,370 . CHF 362,074 O d. CHF 287,393 e. CHF 321,301 You live in Switzerland and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid Ask Spot exchange rate CHF 1.1247/EUR CHF 1.1290/EUR 150-day Forward exchange rate CHF 1.1918/EURCHF 1.1972/EUR 150-day EUR interest rate 8.48% p.a. 8.74% p.a. 150-day CHF interest rate 11.56% p.a. 11.90% p.a. What will your profit (in CHF) be 150 days from now if you borrow CHF7 million and invest in France then convert back to the Swiss franc? a. CHF 303,379 O b. CHF 304,370 . CHF 362,074 O d. CHF 287,393 e. CHF 321,301 You live in Switzerland and want to try to make some money through interest rate arbitrage abroad. You notice the following rates quoted online: Bid Ask Spot exchange rate CHF 1.1247/EUR CHF 1.1290/EUR 150-day Forward exchange rate CHF 1.1918/EURCHF 1.1972/EUR 150-day EUR interest rate 8.48% p.a. 8.74% p.a. 150-day CHF interest rate 11.56% p.a. 11.90% p.a. What will your profit (in CHF) be 150 days from now if you borrow CHF7 million and invest in France then convert back to the Swiss franc? a. CHF 303,379 O b. CHF 304,370 . CHF 362,074 O d. CHF 287,393 e. CHF 321,301

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