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Business, 18.05.2021 19:00 azimgd1612

The Swiss one-year interest rate is 7 percent, while the U. S. one-year interest rate is 2 percent. Assume that interest rate parity exists. If a U. S. firm invests in a Swiss one-year deposit and sells Swiss francs forward with a forward contract to hedge its exchange rate exposure, the effective yield from investing in a one-year deposit in Switzerland will be about:

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The Swiss one-year interest rate is 7 percent, while the U. S. one-year interest rate is 2 percent....

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