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2. OrhanYasarspeculates on the currencies in the foreign currency exchange market. Currently, the spot price for the Polish zlotys Zl439.x7/$ and the 4-month forward rate

2. OrhanYasarspeculates on the currencies in the foreign currency exchange market. Currently, the spot price for the Polish zlotys Zl439.x7/$ and the 4-month forward rate is Zl441.x4/$. Orhan expects the Polish zloty will move to Zl441.5x/$ in the next four months.

a.What should Orlando? If Orhanhas $x00000, explain how much he can earn a profit in dollars? Show calculations.

b.Specify the transaction such as buy/sell at forwarding/spot/expected future spot rate. Compare the risk level of possible transactions.

(PLEASE USE THE NUMBER "5" IN PLACE OF X TO SOLVE THE QUESTIONS)

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