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You take to speculate in the forward market

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Reference no: EM131817941

The current spot exchange rate is $1.20/€ and the three-month forward rate is $1.25/€. Based upon your analysis, you are pretty confident that the spot exchange rate will be $1.35/€ in three months. Assume that you would like to buy or sell €200,000.

What actions would you take to speculate in the forward market?

How much will you make if your prediction is correct?

Reference no: EM131817941

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