Rollins FIN 501 - Benjamin Brown is a speculator

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Question # 00490555 Posted By: dr.tony Updated on: 02/25/2017 08:03 AM Due on: 02/25/2017

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Benjamin Brown is a speculator. He is looking at the following currency market available to him for the Swedish krona:

Present spot rate $0.5010

90-day forward rate 0.5220

Your expectations of the spot rate in 90 days 0.5503

What is the forward annualized premium or discount on the forward Swedish krona?

Calculate Benjamin’s dollar profit or loss from investing $6,000 in the spot market, if his expectation of the future spot rate proves correct?

Calculate Benjamin’s profit or loss from investing $6,000 in the forward market, if his expectation of the future spot rate proves correct?

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score 3 · Accepted Answer · 02/25/2017 08:04 AM

Solution: Rollins FIN 501 - Benjamin Brown is a speculator

Tutorial # 00487011 Posted By: dr.tony Posted on: 02/25/2017 08:04 AM

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