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We know that the yen and the Swiss franc have a 100 yen/ sf 1 exchange...

We know that the yen and the Swiss franc have a 100 yen/ sf 1 exchange rate, meaning one swiss franc buys 100 yen in the forward ER market. If the swiss franc has an interest rate of -.06 and the yen rate is -.02, what is the spot exchange rate for IPT (interest parity theory) to be attained ? Show everything in yen terms and franc terms. 2) If there is no equilibrium initially, will there be equilibrium eventually? If so, what will transpire? Be extremely thorough. Your answer should include covered interest arbitrage.

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