The spotdollareuro rate is $1 .20/1 and the fonNard rate is $1.15!1.You expect the spotdollareuro rate to be $1.05I1 in one year's time. You have 1 million to speculate with using the forward exchange market. (i) Is the euro interest rate higher orlower than the dollar? Explainyour reasoning. (ii) Do you buy or sell 1 million in the forward market? (iii)What is your prot in both euros and dollars if you are correct and the spot dollar euro rate is $1 .05/1 in one year's time? (Show your working in full) (iv) What is your loss in both euros and dollars if you are wrong and the spot dollar-euro rate is $1 .40/1 in one year's time? (Show your working in full)