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Suppose that the current spot exchange rate is $1.95/GBP and the three-month forward rate is $1.90/GBP. In three months, you are fairly confident that the
- Suppose that the current spot exchange rate is $1.95/GBP and the three-month forward rate is $1.90/GBP. In three months, you are fairly confident that the spot exchange rate will be $1.92/GBP.
- If you wanted to earn a profit by speculating in the forward market, what is the amount of a future contract in terms of GBP you should buy to earn $20,000 in profits? Show your work
b. Based on your answer to part (a), what is your profit or loss if the spot exchange rate is $1.86/GBP in three months? Show your work
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Passive Income The Passive Income Millionaire
Authors: Alexus Arellano
1st Edition
9814950882, 978-9814950886
