Assume perfect foresight.The current spot rate is C$2.037 per British pound.The 3-month forward rate is C$2.0383.The spot rate in three months will be C$2.04 per pound.What position must an investor assume in order to make a profit of $17.00?
A) Pound 13,077 short position
B) Pound 10,000 long position
C) Pound 10,000 short position
D) Pound 13,077 long position

Question

Quizplus · Accepted Answer

N = Profit / (S_T - F)= 17 / (2.04 - 2.0383)

Assume Perfect Foresight