You just moved from Switzerland to the United Kingdom to go to school at the University of Bristol for 4 months (120 day

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You Just Moved From Switzerland To The United Kingdom To Go To School At The University Of Bristol For 4 Months 120 Day 1 (25.83 KiB) Viewed 12 times

You just moved from Switzerland to the United Kingdom to go to school at the University of Bristol for 4 months (120 days). Upon opening a bank account, you realise that interest rates here are much higher than they are in Switzerland. Lucky for you, you don't need to incur any debt while you are in the United Kingdom. However, you will need to invest some money. You have two options: you can either invest in Switzerland where annualised 4 month rates are currently 3.4% or you can convert your Swiss francs into British pounds (with a current spot rate of CHF1.1718/GBP and invest in an annualised 4 month rate of 6.8%. Given this information, what is the annualised forward premium or discount that the British pound should trade at against the Swiss franc in the 120-day forward market as implied by interest rate parity? O a. 3.32% discount O b. 3.36% premium c. 3.36% discount O d. 3.29% premium e. 3.18% discount