The bank bought six-month Eurodollar deposits at 6.5% and invested the money in a six-month Swiss krona (SK) bond currency that paid 7.5% a year. The spot rate is $0.18/SK.

  (1). The 6 month forward rate for Swiss krona is quoted at $0.1810/SK. If the bank uses the forward market to hedge the foreign exchange risk. So what's the net interest margin on this investment?

(2). When the forward exchange rate is what, the net interest margin is only 1%/ year.