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Business, 12.12.2019 06:31 bnnn

The current spot exchange rate is $1.50/€ and the three-month forward rate is $1.55/€. based on your analysis of the exchange rate, you are confident that the spot exchange rate will be $1.62/€ in three months. assume that you would like to buy or sell €1,000,000. what actions do you need to take to speculate in the forward market? what is the expected dollar profit from speculation? a. sell €1,000,000 forward for $1.50/€, and you expect to gain $120,000. b. buy €1,000,000 forward for $1.55/€, and you expect to gain $70,000. c. buy €1,000,000 forward for $1.50/€, and you expect to gain $120,000. d. wait for three months, if your forecast is correct buy €1,000,000 at $1.62/€.

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