Question

the prediction indicates that in one month 1$=2 euros. please illustrate calculations and show if this will give you a gain or a loss

Answer 1

If it is a predicted that one dollar is equal to 2 Euros, it will mean that dollar will be appreciating tremendously against Euros and Euro will be depreciating tremendously against dollar and those who will have a position in call option of dollar or one who has went long on dollar will be making higher money.

Let's say current exchange rate for $1= .80 Euro

But when it is predicted that in one month the value of Dollar will be one Dollar equals to 2 Euros and 1 who will be holding $10,000 at the current time will be having= 10000(2/.8)=$25000

Hence it can be said that the American dollar will be appreciating tremendously against euros.