**Kapinsky Capital Geneva (B).** Christoph Hoffman of Kapinsky Capital believes the Swiss franc will appreciate versus the U.S. dollar in the coming 3-month period. He has $100,000 to invest. The current spot rate is $0.5824/SF, the 3-month forward rate is $0.5639/SF, and he expects the spot rates to reach $0.6251/SF in three months.**a. Calculate Christoph's expected profit assuming a pure spot market speculation strategy.**- [Input field for calculation]**b. Calculate Christoph's expected profit assuming he buys or sells SF three months forward.****Solution for (a):** Calculate Christoph's expected profit assuming a pure spot market speculation strategy.- Christoph's expected profit assuming a pure spot market speculation strategy is $______. (Round to the nearest cent.)

Given, Total invested amount = $100,000 Current spot rate = $0.5824/SF 3-month forward rate = $0.5639/SF Expected spot rate = $0.6251/SFa) Computation of Christoph's expected profit: Particulars Amount The number of Swiss francs can buy and invest with $100,00 ($100,000 / $0.5824) SF171,703.30 After 3-months SF's are sold to acquire dollars back (SF 171,703.30 * $0.6251) $107,331.73 Less: Invested Dollars $100,000 Expected profit assuming he buys or sells SF 3 months forward $7,331.73 b) Computation of Christoph's profit assuming buys or sells SF three months forward: Particulars Amount The number of SF's can buy and invest with $100,000 ($100,000/$0.5639) SF177,336.41 After 3-months SF's are sold to acquire dollars back (SF177,336.41 * $0.6251) $110,853 Less: Invested dollars $100,000 Expected profit assuming he buys or sells SF 3-months forward $10,853