Answer:
Based on the given information, the answer to the question "If the spot price of the euro is $1.10 per euro and the 30-day forward rate is $1.00 per euro , and you believe that the spot rate in 30 days will be $1.05 per euro , you can maximize speculative gains by:" would be (a) Buying euros in the spot market and selling the euros in 30 days at the future spot rate. Speculative gains could be maximized by buying euros at the current (spot) rate of $1.10 per euro and then selling the euros in 30 days at the future spot rate of $1.05 per euro, since the investor expects the euro to appreciate over this period. Signing a forward foreign exchange contract to sell the euros in 30 days or signing a forward foreign exchange contract to sell the dollars in 30 days would lock in a fixed exchange rate and eliminate the potential for speculative gains. Buying dollars in the spot market would not likely lead to speculative gains in this scenario.
Step-by-step explanation: