Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a price of $9,708.74, with a maturity value of $10,000. The exchange rate at that time was 1.420 Swiss francs per dollar. Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss investor? a. −7.92% b. 6.00% c. −4.13% d. 12.00% e. 8.25%

    Bond in strange currency
    Purchase value of bond $9,708.74
    Exchange reprimand 1 $ = 1.42Swiss Francs
    So, purchase consume in Swiss Francs 13786.4108Swiss Francs
    (9708.74 * 1.42)
    Maturity amount $10,000.00
    Exchange reprimand 1$ = 1.324Swiss Francs
    So, Maturity aggregate in Swiss FrancsSwiss Francs
    (1000* 1.324) = $13,240.00
    Time of Holding =6 months
    Annualized reprimand of give-back = (Maturity aggregate – Purchase value) / Purchase value * 12/no. of months
    (in Swiss francs)  (13240 – 13786.4108) / 13786.4108 * 12/6
    -7.92%
    So, Annualized reprimand of give-back to swiss investor is -7.92%