The following quotations and expectations exist for the Swiss franc:

(a) What is the premium or discount on the forward Swiss franc?

(b) If your expectation proves correct, what would be your dollar profit or loss from investing $4,000 in the spot market? How much capital would you need now to carry out this operation? What are the major risks associated with this speculation?

(c) If your expectation proves correct, what would be your dollar profit or loss from investing $4,000 in the forward market? How much capital would you need now to speculate in the forward market? What are the major risks associated with the speculation?

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Present spot rate 90-day forward rate Your expectation of the spot rate in 90 days $0.5000 0.5200 0.5500