PLEASE do Part 2

Casper Landsten-Thirty Days Later. Casper Landsten once again has

$0.9

million (or its Swiss franc equivalent) to invest for three months. He now faces the following rates. Should he enter into a covered interest arbitrage (CIA) investment?

Arbitrage funds available	$	900,000
Spot exchange rate (SFr/$)		1.3393
3-month forward rate (SFr/$)		1.3286
U.S. Dollar annual interest rate		4.746	%
Swiss franc annual interest rate		3.624	%

Question content area bottom

Part 1

The CIA profit potential is

2.0992.099%,

which tells Casper Landsten he should borrow

U.S. dollars

and invest in the

lower

yielding currency, the

Swiss franc

, and then sell the

Swiss franc

principal and interest forward three months locking in a CIA profit. (Round to three decimal places and select from the drop-down menus.)

Part 2

The CIA profit amount is

$enter your response here.

(Round to the nearest cent.)