Money Market versus Put Option Hedge Narto Co. (a U.S. firm) exports to Switzerland and expects to receive 500,000 Swiss francs in one year. The one-year U.S. interest rate is 5 percent when investing funds and 7 percent when borrowing funds. The one-year Swiss interest rate is 9 percent when investing funds and 11 percent when borrowing funds. The spot rate of the Swiss franc is $0.80. Narto expects that the spot rate of the Swiss franc will be $0.75 in one year. A put option is available on Swiss francs with an exercise price of $0.79 and a premium of $0.02
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