You are a currency trader specializing in the Japanese yen, and you are confident that the spot exchange rate will be *118 per dollar in six months based on your analysis. The current spot exchange rate is 123 per dollar, and the six-month forward rate is 113 per dollar. Assume that you would like to buy or sell M100,004,000. Use direct quotes in your calculations. Enter the numeric portion of your answer without the currency symbols. Required: a-1. How should you speculate in the forward market to make a profit? a-2. What is the expected dollar profit from speculation? b. What would be your speculative profit in dollar terms if the spot exchange rate turns out to be 117 per dollar in six months? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Answer is complete but not entirely correct. Req B What would be your speculative profit in dollar terms if the spot exchange rate turns out to be 117 per dollar in six months? Note: Round intermediate calculations to 5 decimal places. Round your final answer to nearest whole dollar. Speculative profit in dollar terms 353,982 < Req A2 Reg
You are a currency trader specializing in the Japanese yen, and you are confident that the spot exchange rate will be *118 per dollar in six months based on your analysis. The current spot exchange rate is 123 per dollar, and the six-month forward rate is 113 per dollar. Assume that you would like to buy or sell M100,004,000. Use direct quotes in your calculations. Enter the numeric portion of your answer without the currency symbols. Required: a-1. How should you speculate in the forward market to make a profit? a-2. What is the expected dollar profit from speculation? b. What would be your speculative profit in dollar terms if the spot exchange rate turns out to be 117 per dollar in six months? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Answer is complete but not entirely correct. Req B What would be your speculative profit in dollar terms if the spot exchange rate turns out to be 117 per dollar in six months? Note: Round intermediate calculations to 5 decimal places. Round your final answer to nearest whole dollar. Speculative profit in dollar terms 353,982 < Req A2 Reg
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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