The recent market data on the U.S. and UK are shown as:

the spot rate of the UK pound $1.27/

the 90-day forward rate $1.29/

the 180-day forward rate $1.30

interest rate (TB) in the U.S.: 3% (per year)

interest rate (TB) in the UK.: 1% (per year)

If you have $1 million available for 6 months, where do you want to invest (assume no transaction costs)? Explain why. Please apply all three decision making rules, as discussed in class, and show that your answers are consistent. (Rule 3 will be covered on Oct. 20)