(30 points) Today is May 08, 2020. Consider a 4-month forward contract on British Pound with a spot price of $1.6/. Let the risk-free interest rate be 7% and 5% per annum for the USD and British Pound respectively for all maturity. a) Calculate the "correct" price of the forward contract today. Consider a 4-month forward contract for 1 million (signed today using the correct forward price) b) One month later, on June 08, 2020, suppose the spot price of the British Pound increases to $1.8/, what will be the value of this forward contract (for 1 million ) on this day? (Assume the interest rates remain the same.) Suppose on June 08, 2020, this forward contract (for 1 million ) is quoted at $20,000. What should you do in order to make money? d) Suppose you establish the position in c), calculate the profit of your position when the forward contract expire