(Solution) - The current dollar Swiss franc spot exchange rate is 0 5685 If -(2025 Original AI-Free Solution)

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The current dollar/Swiss franc spot exchange rate is 0.5685. If you invest one dollar for ninety days in the US domestic riskless asset, you earn $1.0101, and if you invest one franc for ninety days in the Swiss riskless asset, you earn 1.0113 francs (assume continuous compounding). A broker offers you a ninety- day forward contract to buy or sell 1 million francs at the exchange rate of 0.55 dollars/franc. Are there arbitrage profi ts to be made here? If so, compute them.