1. If the expected $/ exchange rate 90 days from now is $1.45/, and the 90-day forward rate is $1.43/, an investor expects to profit by:

a) selling euros on at the 90-day forward rate, and planning to buy euros on the spot market in 90 days.

b) buying euros at the 90-day forward rate, and planning to sell euros on the spot market in 90 days.

c) selling euros at the 90-day forward rate and buying euros on the spot market today.

d) buying euros at the 90-day forward rate and selling euros on the spot market today.

2. Calculate the 6 month forward rate given the following information: The EUR/USD spot rate is 1.4. The 6 month (184 days) EUR zero rate is 6.1% and the USD zero rate is 4.2%.

a) 1.38665% b) 1.42875% c) 1.36616% d) 1.41698%