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The current spot exchange rate is $1.55/€ and the three-month forward rate is $1.50/€.Based on your analysis of the exchange rate,you are confident that the spot exchange rate will be $1.62/€ in three months.Assume that you would like to buy or sell €1,000,000.What actions do you need to take to speculate in the forward market? What is the expected dollar profit from speculation?
Nile River
The longest river in Africa, flowing north through northeastern Africa to drain into the Mediterranean Sea.
Mediterranean Sea
An almost entirely land-enclosed sea that connects to the Atlantic Ocean, bordered by the Mediterranean region.
Delta
A delta is a landform at the mouth of a river where it spreads out into several branches before entering a larger body of water, typically formed from sediment deposition.
Tectonics
The branch of geology concerned with the structure and motion of the Earth's crust and large scale structural features such as mountains and ocean basins.
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