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Discuss about the covered interest arbitrage

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Question: Covered Interest Arbitrage. The spot and 360-day forward rates on the Swiss franc are SF 1.8 and SF 1.7, respectively. The risk-free interest rate in the United States is 8 percent, and the risk-free rate in Switzerland is 5 percent. Is there an arbitrage opportunity here? How would you exploit it?

Reference no: EM131733366

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