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5. (Forward profit/loss) Mark enters a long position in a forward contract ofE20,000 maturing in 6 months. The forward price is $1.24 per euro. Computer Mark's profit/loss at maturity for each ofthe following possible ending spotrate in 6 months: a) So(Sve) 1.21, b Se($e) 1.24, c) Se($/E) 1.28. 6. (Expectations Hypothesis) Explain the expectations hypothesis regarding the FX forward rate. 7. (Forward transactions and hedging) The three-month interest rate is 3% for the dollar and is 5% for the British pound. The current spot rate is si-5556E. A dealer sells f 20,000,000 forward for dollars for delivery in three months. Analyze risk that the dealer is facing and provide apossible solution to hedge such risk. What would be the forward rate the dealer asks for