Swiss National Bank Issues Gold Coin for Anniversary

Hi all, I would like to share an anecdote about SNB that a professor from University of Zurich and former SNB employee told in a lecture some years ago.

Switzerland would celebrate a big anniversary (cannot recall how many years of existence) and SNB thought about issuing a gold coin worth 500 francs but the intrinsic value would be 250 francs. As a result, they would celebrate with a special way and make some money as well.

Our professor told us that he was really surprised when he listened to this idea and asked us why. The guy who answered correctly would get 10 francs by him. That's how I made my first 10 francs in Zurich.

As a blog with some bright minds in finance industry, could you find what kind of financial product this coin resembles and why issuing it was such a bad idea?

Moreover how would you make money as a hedge fund manager from that?

I will answer after getting some interesting answers. Hope you prove yourselves by solving thess simple questions

1 Comments
 

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