Problem regarding the spot rate of sf

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Current spot rate of SF = $0.6543. 1-year interest rate in the U.S. = 7.5%. 1-year interest rate in the Switzerland = 3.5%. If you expect the spot rate of SF one year from now to be $0.6925, which strategy will give you a profit?

  • Borrow in $ / Invest in SF
  • Borrow in SF / Invest in $

Reference no: EM131160839

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