Question $26$

Suppose the US interest rate $(Rh)$ is $4\%,$ the Swiss interest rate $(Rh)$ is $3\%,$ and you have a credit line of $$10,000,000$ in the US and

CHF $5,000,000$ in Switzerland. Suppose your estimated covered rate of return from foreign country $($Rcf$)$ is $5\%,$ then your covered

interest arbitrage profit will be:

USD $300,000$

USD $100,000$

CHF $100,000$

CHF $50,000$