An investor enters into a short 1 months' forward contract to sell 100,000 British pounds for US dollars. Use the rates in the table to indicate what position the investor will take and calculate the gain/loss of the transaction.

TableSpot and forward quotes of the USD/GBP exchange rate

Maturity

Bid

Offer

Spot

1.2732

1.2736

1-month forward

1.2746

1.2751

3-month forward

1.2772

1.2777

1-year forward

1.2883

1.2889

1. If the exchange rate at the end of the contract is 1.24 the investor is obligated to (buy/sell)pounds.
2. If the exchange rate at the end of the contract is 1.24 the investor will invest in pounds at a price ofwhen they are worth 1.24.
3. The investor will make a (gain/loss)? The gain/loss of the transaction is $?
4. If the exchange rate at the end of the contract is 1.34 the investor is obligated to (buy/sell)pounds?
5. If the exchange rate at the end of the contract is 1.34 the investor will invest in pounds at a price ofwhen they are worth
6. The investor will make a (gain/loss)1.34. The gain/loss of the transaction is $?