Questions 4042 are based on the following information: Suppose you observe the following exchange rates: S($/)=1.3. The one-year forward rate is F1($/)=1.32. The risk-free interest rate in the U.S. is 5% and in UK it is 2%. You can borrow either $1,300,000 or 1,000,000. Briefly and clearly explain your arbitrage strategy. Show your work in each step to receive partial credits