Assume that the three month FR = $2.00/1 and a speculator believes that the spot rate in

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Assume that the three month FR = $2.00/£1 and a speculator believes that the spot rate in three months will be SR = $2.05/£1. How can a person speculate in the forward market? How much will the speculator earn if he or she is correct?

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International Economics

ISBN: 978-1119915737

11th edition

Authors: Dominick Salvatore

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Question Posted: Dec 09, 2015 02:55 AM

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Assume that the three month FR = $2.00/1 and a speculator believes that the spot rate in

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Hence for final analysis we can say that the s...View the full answer

International Economics

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