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Exercise3: (4 marks) The current spot exchange rate is EUR/AUD=1.5000 and the six-month forward rate is EUR/AUD=1.5500. Based on your analysis of the exchange rate, you are pretty confident that the spot exchange rate will be EUR/AUD-1.5200 in six months. Assume that you would like to buy or sell EUR 1,000,000. 6- What actions do you need to take to speculate in the forward market? A. Sell EUR1,000,000 forward for EUR/AUD=1.5500 B. Sell EUR 1,000,000 forward for EUR/AUD=1.5200 C. Buy EUR1,000,000 forward for EUR/AUD=1.5500 D. Buy EUR1,000,000 forward for EUR/AUD=1.5500 2 7- What is the expected AUD profit from speculation? A. 50.000AUD C. 30.000AUD B. 20,000AUD D. - 30.000AUD 8- What would be your speculative profit in AUD terms if the spot exchange rate actually turns out to be EUR/AUD-1.5300. 20.000AUD 30.000AUD B. 10.000AUD D -10,000AUD 9- What would be your speculative profit in AUD terms if the spot exchange rate actually turns out to be EUR/AUD-1.5600. C. 20,000AUD D. 10.000AUD C. 30.000AUD -10.000AUD