A futures contract expiring in april on mexican pesos is, Ask an Expert

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A futures contract expiring in April on Mexican pesos is available now for $.08 per unit. Also, a forward contracts is available for the same settlement date at a price of $.085 per peso. How could speculators capitalize on this situation, assuming zero transaction costs? How would such speculative activity affect the difference between the forward contract price and the futures price? Write your answer in detail.

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Financial Management, Finance

Category:- Financial Management
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