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International Economics 13th Edition by Robert Carbaugh
Edition 13ISBN: 978-1439038949International Economics 13th Edition by Robert Carbaugh
Edition 13ISBN: 978-1439038949 Exercise 13
Assume a speculator anticipates that the spot rate of the franc in three months will be lower than today's three-month forward rate of the franc, $0.50 5 =1 franc.
a. How can this speculator use $1 million to speculate in the forward market?
b. What occurs if the franc's spot rate in three months is $0.40? $0.60? $0.50?
a. How can this speculator use $1 million to speculate in the forward market?
b. What occurs if the franc's spot rate in three months is $0.40? $0.60? $0.50?
Explanation
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Suppose a speculator anticipates that th...
International Economics 13th Edition by Robert Carbaugh
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