Assume the Following Information From the Perspective of U

question 50

Multiple Choice

Assume the following information:
$\begin{array} { l l l } \text { Spot rate today of Swis franc } & = & \$ 60 \\1 \text {-year forward rate as of today far Swiss franc } & = & \$ .63 \\\text { Fognected spot rate l year from now } & = & \$ 64 \\\text { Rate an 1-year deposits denominated in Swiss francs } & = & 7 \% \\\text { Rate an } 1 \text {-year deposits denominated in U.S. dallars } & = & 9 \%\end{array}$
From the perspective of U.S. investors with $1,000,000, covered interest arbitrage would yield a rate of return of ____%.

• A) 5.00
• B) 12.35
• C) 15.50
• D) 14.13
• E) 11.22

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Definitions:

Inventory

The total amount of goods or materials contained in a store or warehouse at any given time.

Place Element

One of the four Ps in the marketing mix, referring to the distribution and accessibility of a product or service to the target market.

Marketing Mix

The set of controllable marketing variables, traditionally identified as product, price, place, and promotion, that a company uses to pursue its marketing objectives.

Supply Chain

The network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.