Multiple Choice
If a speculator observes that the current 3-months forward rate on Swiss francs is $1.05 = 1 franc, but he/she expects that the spot rate in 3 months will be $1.10 = 1 franc, then this Speculator would now
A) buy dollars on the forward market.
B) buy francs on the forward market.
C) sell francs on the forward market.
D) buy francs on the spot market and simultaneously sell francs on the 3-months forward Market if the current spot rate is $1.07 = 1 franc.
Correct Answer:
Verified
Correct Answer:
Verified
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