... Chapter Outline Background on foreign exchange markets Factors affecting exchange ... was expected to be $1.45, everyone would buy pounds forward and sell them at the future spot rate 16 Forecasting Exchange Rates (cont’d) Mixed forecasting involves using a combination of forecasting ... and convert to $11,111,111 Invest the $11,111,111 million for ten days at percent annualized (or 166 7 percent over ten days), which will generate $11,129,630 After ten days, convert the $11,129,630...