Question
Hi, I have some calculation questions to be done, which I've attempted some parts of the question myself, however i'm not sure if i've done
Hi, I have some calculation questions to be done, which I've attempted some parts of the question myself, however i'm not sure if i've done it right. I need help with the calculations of the following questions. Could you please show me the working out for the questions with clear explanation. So, that I can understand it better.
Thank you
Q1. Devise a speculation strategy that enables your organisation to take advantage of your predicted changes in the exchange rates. You should specify which currencies you will buy or sell.As part of your strategy you must develop a portfolio as of 22nd of August 2020. This portfolio will comprise of the currency pair analysed in your market view.
Trading strategy of a speculation:
- To profit from USD depreciating, I will be selling USD at a high price but eventually it will depreciate. which means the exchange rate will decrease. USD value will drop and then again represents the price. So, I will sell now at a high price and buy back when cheap in the future which gives me a profit. So i'm selling high and buying low in the future and that gives me profit.
- USD, i am speculating the USD to depreciate, so you buy at the low price now and sell it once it appreciates. So, I'm selling at a higher price once it depreciates, hence I make a profit this way.
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