2. Your firm just received an invoice for 125,000 payable in 90 days. The current exchange rate for GBP/USD is $1.35. You fear that the USD will depreciate against the GBP due to the relatively low interest rates currently prevailing in the U.S. The 90-day forward rate for GBP/USD is projected to equal $1.40.

a. What is the cost of the invoice in dollars at the current spot rate?

b. What is the cost of the invoice in dollars at the forward rate?

c. What would be the transaction gain or loss if the spot rate in 90 days equals the current forward rate?