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Andrea Cujoli Is a Currency Speculator Who Enjoys "Betting" on Changes

question 35

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Andrea Cujoli is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Andrea thinks the yen will move to ¥128.00/$ in the next six months. If Andrea buys $100,000 worth of yen at today's spot price her potential gain is ________ and her potential loss is ________.


Definitions:

Lumber

Timber sawed or split into planks, beams, and other shapes, used for building or crafting purposes.

Demand

The desire to own anything, accompanied by the power and willingness to pay for it.

Technological Advance

Refers to improvements and innovations in technology that increase productivity and efficiency in various sectors of the economy.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public services and government activities.

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