subject
Business, 15.04.2020 02:05 evanredpath

Assume a speculator anticipates that the spot rate of the franc in three months will be lower than today’s three-month forward rate of the franc, $0.50 = 1 franc. Complete the following sentence explaining how this speculator can use $1 million to speculate in the forward market. The U. S. speculator should francs today for delivery in three months at today’s forward rate of the franc, which equals $0.50. What occurs if the franc’s spot rate in three months is $0.40? In three months, the speculator can purchase francs at $0.40 and sell them for the previously contracted rate of $0.50 per franc, thus profiting $0.10 on each franc. In three months, the speculator must purchase francs at $0.40 and resell them at $0.50 per franc, thus suffering losses of $0.10 on each franc specified in the forward contract. In three months, the speculator must purchase francs at $0.40 and resell them at $0.50 per franc, thus neither profiting nor losing from the transaction.

ansver
Answers: 3

Another question on Business

question
Business, 21.06.2019 14:30
The government often provides goods that are nonrivalrous and nonexclusive to overcome which market failure
Answers: 1
question
Business, 21.06.2019 19:20
In 2007, americans smoked 19.2 billion packs of cigarettes. they paid an average retail price of $4.50 per pack. a. given that the elasticity of supply is 0.50.5 and the elasticity of demand is negative 0.4−0.4, derive linear demand and supply curves for cigarettes. the demand equation is qdequals=nothingplus+nothing times ×p and the supply equation is qsequals=nothingplus+nothing times ×p.
Answers: 2
question
Business, 21.06.2019 19:30
Maker-bot corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. no dividends were declared in the first two years. if the company pays $400,000 of dividends in the third year, how much will common stockholders receive?
Answers: 2
question
Business, 21.06.2019 23:00
James has set the goal of achieving all "a"s during this year of school.which term best describes this goal
Answers: 2
You know the right answer?
Assume a speculator anticipates that the spot rate of the franc in three months will be lower than t...
Questions
question
Mathematics, 11.11.2020 01:20
question
Mathematics, 11.11.2020 01:20
question
Mathematics, 11.11.2020 01:20
question
English, 11.11.2020 01:20
question
Mathematics, 11.11.2020 01:30
question
Mathematics, 11.11.2020 01:30
question
Social Studies, 11.11.2020 01:30
Questions on the website: 13722367