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Suppose that your company believes the Swiss franc will appreciate versus the U.S. dollar in the coming three-month period. Your company has $500,000 to invest.
Suppose that your company believes the Swiss franc will appreciate versus the U.S. dollar in the coming three-month period. Your company has $500,000 to invest. The current spot rate is $0.9820/SF, the three-month forward rate is $0.9640/SF, and you expect the spot rates to reach $1.0250/SF in three months. What will be your companys profit / loss if you buy Swiss franc and keep for 3 months?
A USD 12,500
B CHF12,500
C Unknown today
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