Question: . Assume that the three-month FR = $2.00/1 and a speculator believes that the spot rate in three months will be SR = $1.95/1. How

. Assume that the three-month FR = $2.00/1 and a speculator believes that the spot rate in three months will be SR = $1.95/1. How can a person speculate in the forward market? How much will the speculator earn if he or she is correct? What will the result be if in three months SR = $2.05/1 instead? (5 marks)

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