Suppose that the spot price of the Swiss franc in terms of the
Australian dollar is 0.72 dollars. The 90-day forward price is
A$ 0.81. A currency trader who is willing to ignore risk
considerations and thinks the Swiss franc will be worth 0.90
Australian dollars in 90 days should
1. sell francs forward in return for
Australian dollars.
2. sell Australian dollars forward in
return for francs.
3. buy Swiss francs forward in return
for the Australian dollars.
4. do either 2 or 3.
Choose the correct option.