Suppose the dollars per pound spot rate is $1.31/ and the 12-month forward rate implies a forward discount of 4.00% on the pound. What must be the 12-month forward rate? [hint: The pound is traded at a discount in the forward market, compared to spot trades]

Suppose the three-month forward rate for the Indian rupees (INR) per Japanese yen (JPY) was INR 0.75/JPY, while the spot rate at the time was INR 0.73/JPY. A scientist located in New York speculates that the spot rate three months later will be INR 0.77/JPY. They decided to devote 500,000 yen in order to try to profit from this speculation, by making a trade in the forward market. Describe the cash flows and the profit if the prediction comes true (Specify the amounts and currencies). [hint: the trade was made in the forward market; it was not a buy-and-hold strategy of nor ]

An option trader purchased a call option on Russian ruble () with a strike price of $0.01350/, at a premium of 0.00040 dollars per ruble and with an expiration date three months from now. The option is for 2,500,000. (a) What would be the traders profit or loss if the spot rate at maturity is $0.01310/? (b) What would be the traders profit or loss if the spot rate at maturity is $0.01380/?