Profit assuming pure spot market speculation strategy

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Reference no: EM13885095

Christoph believes the Swiss franc will appreciate versus the U.S dolar in the coming 3-month period. He has $100,000 to invest. The current spot rate is $0.5820/SF, the 3-month forward rate is $0.5640/SF and he expects the spot rates to reach $0.625/SF in three months.

A. Calculate Christoph's expected profit assuming pure spot market speculation strategy.

B. Calculate Christoph's expected profit assuming he buys or sells SF three months forward.

Reference no: EM13885095

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