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What is the maximum interest rate that mountain watch

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Question: The financial vice-president of Mountain Watch Co., a Swiss corporation, is exploring the possibility of borrowing English pounds to finance short-term needs for the next 6 months. A lender has been found who would lend £2,000,000. If the 6- month forward rate for English pounds is Swiss Fr.2.2933 = £I and the current spot rate is Swiss Fr.2.3750 = £I, what is the maximum interest rate that Mountain Watch would be willing to pay? The effective annual interest rate on a 6-month loan in Switzerland is 5 percent.

Reference no: EM131750431

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