Kapinsky Capital Geneva (B). Christoph Hoffeman of Kapinsky Capital believes the Swiss franc will appreciate versus the U.S. dollar in the coming 3-month period. He has

$100,000

to invest. The current spot rate is

$0.5824/SF,

the 3-month forward rate is

$0.5639/SF,

and he expects the spot rates to reach

$0.6252/SF

in three months.

a. Calculate Christoph's expected profit assuming a pure spot market speculation strategy.

b. Calculate Christoph's expected profit assuming he buys or sells SF three months forward.

a. Calculate Christoph's expected profit assuming a pure spot market speculation strategy.

Christoph's expected profit assuming a pure spot market speculation strategy is

(Fill in blank )

(Round to the nearest cent.)

b. Calculate Christoph's expected profit assuming he buys or sells SF three months forward.

Christoph's expected profit assuming he

buys

sells

SF three months forward is

(Fill in blank )

(Choose from the drop-down menu and round to the nearest cent.)