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Christoph Hoffeman trades currency for Blade Capital
Christoph Hoffeman trades currency for Blade Capital. Christoph has $10 million to begin with, and he must state all profits at the end of any speculation in U.S. dollars. The spot rate on the euro is $1.3358/€, while the 30-day forward rate is $1.3350/€.
- If Christoph believes the euro will continue to rise in value against the U.S. dollar, so that he expects the spot rate to be $1.3600/€ at the end of 30 days, how could he speculate using forwards?
- If Christoph believes the euro will depreciate in value against the U.S. dollar, so that he expects the spot rate to be $1.2800/€ at the end of 30 days, how could he speculate using forwards?
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