How might an investor use forward futures and options, Finance Basics

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How might an investor use forward futures and options

1. What is exchange-rate risk? How can exchangerate risk be hedged using forward, futures, and options contracts?

2. How might an investor use forward, futures, and options contracts to speculate on the future value of a currency?

3. Suppose you are convinced that the value of the Canadian dollar will rise relative to the U.S. dollar. What steps could you take to make a profit based on this conviction?

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