If annual interest rates are 10% in the U.S. and 4% in Switzerland with quarterly compounding and the 90-day forward rate for the Swiss franc is $0.3864/SFr, at what current spot rate will interest rate parity hold?
A) $0.3910/SFr
B) $0.3897/SFr
C) $0.3807/SFr
D) $0.3762/SFr
E) $0.3648/SFr
Correct Answer:
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