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Suppose the one-year interest rate on Swiss France is 10% and the US Dollar interest rate is 12% and the current $/SF spot rate is 0.8.

What do you expect the 12-month forward rate by using the interest rate parity?

Suppose the actual 12-month forward rate is 0.83. Would you like to invest in SF or Dollar now?

Reference no: EM131089645

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