It is now $2$nd May $2023,$ you are an experienced speculator and have just received the

following exchange rate forecasts from financial analyst; $4$ months TZS$/$US$;

US$: TZS $2,5402,590$

Your bank $($Umoja commercial bank$)$ provides you with the following quotations;

$2$

nd May exchange rate

Spot US$: TZS $2,475-2,500$

Four months forward $10-20$ pm

Assume can speculate by buying and selling $1,00,000$ units of either currency

Required:

$($i$)$ Suppose you strongly believe in the exchange rate forecasts by financial analyst

which step would you take to benefit from possible spot speculation? What will

be your expected profit from this speculation in TZS$?$

$($ii$)$ Which steps would you take to benefit from a possible forward speculation? What

will be your expected profit from this speculation? In TZS

$($iii$)$ Suppose the actual exchange rate turns out to be US$: TZS $16001605.$ What

would be your actual profit or loss on speculation in TZS$?$