Respuesta :
Answer: $168,067.23
Step-by-step explanation:
The forward rate of $1.19/€ is less than your expected future spot rate of $1.21/€.
Therefore,
if you buy the euro forward, you should be able to sell euros at a higher dollar price.
You should speculate by buying the euro forward, in which case you wish to sell $10,000,000 forward.
The euro value of $10,000,000 is
$10,000,000 / ($1.19/€) = €8,403,361.34.
The euro value is €8,403,361.34 in the forward market.
If we contract to buy €8,403,361.34 forward, the expected dollar profit to be realized is:
[$1.21/€-$1.19/€] × €8,403,361.34 = $168,067.23
Therefore,
The contract you would make if you speculate in the forward market either buying or selling is:
€168,067.23
