FNCE 4070 – Final Exam
1-year interest rates in Europe are 2% and the 1-year forward exchange rate between EUR and CHF is 0.8600. What is the 1-year interest rate in Switzerland? (2 points) If the forward exchange rate stays fixed at 0.8600, interest rates in Switzerland stay fixed (from part (a) and European interest rates increase to 3% do you expect the Swiss ... ................
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