question archive Hans, is once again speculating on the movement of currencies
Hans, is once again speculating on the movement of currencies
Subject:FinancePrice: Bought3
Hans, is once again speculating on the movement of currencies. Hans has $10 million to begin with, and he must state all profits at the end of any speculation in U.S. dollars. The spot rate on the euro is $1.3358/6, while the 30-day forward rate is $1.3350/6. a) If Hans believes the euro will continue to rise in value against the U.S. dollar, so that he expects the spot rate to be $1.3600/E at the end of 30 days, what should he do? b) If Hans believes the euro will depreciate in value against the U.S. dollar, so that he expects the spot rate to be $1.2800/E at the end of 30 days, what should he do?
