How would you speculate using a forward contract

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Reference no: EM131213546

The current spot exchange rate is $1.20/euro.

The current 90-day forward exchange rate is $1.18/euro.

You expect the spot rate to be $1.22/euro in 90 days.

How would you speculate using a forward contract?

If many people speculate in this way, what pressure is placed on the value of the current forward exchange rate?

Reference no: EM131213546

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