Sam is a currency speculator and expects that the euro will depreciate against the U.S...
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Finance
Sam is a currency speculator and expects that the euro will depreciate against the U.S dollar. He has USD 10 million to speculate using the 30 days forward market. The spot rate on the euro is USD 1.3558/EUR , while the 30-day forward rate is USD 1.3550/EUR
1) should Sam buy or sell euro at the 30-day forward market? calculate the notional value in euro
2)Using your answer to part 1) calculate a) profit per euro and b) profit to the position if the spot rate at the end of 30-day is USD1.28/EUR
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