A speculator who expects a foreign currency to appreciate could purchase the currency forward and, when it is received, sell it in the spot market.

Question

Quizplus · Accepted Answer

A speculator expecting a foreign currency to appreciate can buy the currency forward, locking in a price now, and then sell it in the spot market at a potentially higher price when the contract matures, making a profit from the appreciation.

A Speculator Who Expects a Foreign Currency to Appreciate Could