Question: The interest rate in the U.S. is 4%, while the interest rate in Switzerland is 7%. The spot rate for the Swiss franc is $1.04

The interest rate in the U.S. is 4%, while the interest rate in Switzerland is 7%. The spot rate for the Swiss franc is $1.04 per CHF. According to the international Fisher effect (IFE), the Swiss franc's spot exchange rate should ____ by about ____ over the year.

Question 10 options:

depreciate; 2.8%

appreciate; 2.8%

depreciate; 1.87%

appreciate; 3.94%

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