Question 2 Determine if there is an arbitrage opportunity given the following information: Borrow 20,000 USD and Invest in GBP in the London. GBP risk-free rate = 4.5% continuous rate Borrow at U.S. risk-free rate =3.75% continuous rate Spot rate for GBP/USD = 1.20 Forward rate GBP/USD = 1.35 (translation: $1.35 = 1 GBP) a. Is there an arbitrage opportunity? (1 point.) b. Why? (2 points.) c. How do you construct the arbitrage? (2 points.) d. What is the arbitrage profit? (2 points.)