How can a dollar-based investor make money

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Reference no: EM131564004

Suppose you observe the following exchange rates: ($/SFr) = 0.85 (i.e. SFr 1 = $.85) The one-year forward rate is 1($/SFr) = 0.935 (i.e. SFr 1 = $.935). The risk-free interest rate in the U.S. is 5% and in Switzerland it is 2%. How can a dollar-based investor make money?

Reference no: EM131564004

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