The current spot exchange rate is $1.91/ and the three-month forward rate is $1.90/. Based on your analysis of the exchange rate, you are pretty confident that the spot exchange rate will be $1.94/ in three months. Assume that you would like to buy or sell 1,000,000. What actions do you need to take to speculate in the forward market? What is the expected dollar profit from speculation?

Buy Pound now, profit 40,000 pounds

Sell Pound now, profit 40,000 pounds

Buy Pound now, profit 30,000 pounds

Sell Pound now, profit 30,000 pounds