Assume that you believe in the international fisher effect

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Reference no: EM131524299

IFE and Forward Rate The one-year Treasury (risk-free) interest rate in the U.S. is presently 6%, while the one-year Treasury interest rate in Switzerland is 13%. The spot rate of the Swiss franc is $.80. Assume that you believe in the international Fisher effect. You will receive 1 million Swiss francs in one year.

What is the estimated amount of dollars you will receive when converting the francs to U.S. dollars in one year at the spot rate at that time?

Reference no: EM131524299

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