Use the following forward bid-ask, and interest rates for of AUD and USD,

Spot rate in AUD/USD: 1.3095

180-day forward rate in AUD/USD: 1.3321

The annual interest rates for AUD (lending or borrowing): 7%; for USD: 3%

Assume a year has 360 days.

1. Use PPP to explain if:
   1. the 180 days forward rate is higher than expected 180 days spot rate
   2. an investor can make profit by investing or borrowing USD

Please show the working, thank you.