2. A US investor, George Soros, uses the historical data in FX markets and runs a regression (the numeraire currency is always USD, every rate is annualized). Assume the interest rate in the US is 2% and the interest rate in the UK is 4%. He runs a regression of the appreciation rates on the past one-year forward premium for US dollars and the GBP exchange rate. George obtains the following results: s0,1yeartGBP=00.7fpt1GBP/USD Is UIP violated? Which carry trade strategy should George adopt? If he starts with a notional position of 10,000 dollars at the beginning of the year, how much would he expect to make at the end