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Emily speculates on the currencies in the foreign currency exchange market. Currently the spot price for the Danish krona is Dk199.87/$ and the 3-month forward
Emily speculates on the currencies in the foreign currency exchange market. Currently the spot price for the Danish krona is Dk199.87/$ and the 3-month forward rate is Dk198.53/$. Emily thinks the Danish krona will move to Dk198.00/$ in the next three months.What should Emily do? If Emily has $100,000 explain how much she can earn as profit? Show calculations. Specify the transaction such as buy/sell at forward/spot/ expected future spot rate.
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