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Suppose that Luis wishes to invest $ 1 0 0 . 0 0 0 in the Swiss franc market. The spot rate at the time
Suppose that Luis wishes to invest $ in the Swiss franc market. The spot rate at the time of the decision was: $SF and the sixmonth forward rate is quoted at $SF He speculates that the spot rate six months from now is going to be $SF Luis decides to follow his instincts and stays in the spot market. Suppose that Luis is right about his speculation, calculate his profit.
If Luis is wrong. what would be his maximum loss? Assume no commissions have to be paid
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