Interest rate differential

Reference no: EM1334148

Suppose interest rate differential in dollar and Swiss francs is 4 percent per annum (U.S. and Swiss interest rates are 7 and 3 percent respectively) and SF is in 1.4 percent premium against dollar, with spot rate at $.633/SF and one year forward in SF is $.6419/SF. What actions would you take to profit from the above scenario provided that you can borrow SF 1,000,000.00 or its dollar equivalent?

Reference no: EM1334148

Questions Cloud

Evolutionary change and revolutionary change : Describe the differences between evolutionary change and revolutionary change.

Pros and cons of different security techniques : Why is it important for an organization to follow the standard systems acquisition method?pros and cons of different security techniques.

New law on food importation : Do you think the new law on food imports will make food safer? Explain. What is the most significant provision? Why?

How do organizations decline : Why do organizations grow? How do organizations decline?

Interest rate differential : Assume interest rate differential in dollar and Swiss francs is 4 percent per annum-What actions would you take to profit from the above condition provided that you can borrow SF 1,000,000.00 or its dollar equivalent?

Shwo the training modules : Examine three training modalities and explian a scenario that would be most appropriate for each modality and why.

Uncovering barriers to effective implementation initiatives : Find the best method in uncovering barriers to effective implementation initiatives?

How to allocate for the management reserve : How much would you allocate for the management reserve? What are your assumptions about these reserves.

Addressing the attorney ethics : Do you think lawyers that contact potential clients by mail, after an accident would be in bad taste?

User Account

All Pages