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The current spot exchange rate is $1.55/ and the three-month forward rate is $1.50/. You expect the spot rate three months later to be $1.52/.
The current spot exchange rate is $1.55/ and the three-month forward rate is $1.50/. You expect the spot rate three months later to be $1.52/. (a) What strategy should you implement in the forward market to profit from your expectation? (b) What is your profit if the price three months later is $1.52/? (c) What is you profit if the price three months later is $1.48/?
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