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Consider 5.3% Swiss franc/U.S dollar dual currency bonds that pay $1,034.1 at maturity per SF1,000 of par value. It sells at par. What is the implicit SF/$ exchange rate at maturity? (USD/CHF X.XXXX)
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Computation of Implicit SF/$ exchange rate at maturity:
Given,
Amount received in $ at maturity = $1,034.1
Par Value of Bonds in Swiss Francs = SF1,000
Implicit Exchange Rate = SF1,000/$1,034.1 = SF 0.97 /1$
