Please answer problem 2. Problem 1 context is provided.

Problem 1. (30 Points) On March 30, 2023, the euro's spot exchange rate and its 3-month forward exchange rate are quoted at $1.20 and $1.15, respectively. To risk-neutral speculators, they expect the euro's future spot exchange rate to be $1.13 three months from now. On the same day, the 3-month US and European interest rates are 3.75% and 2.25%, respectively. Answer the following questions: Problem 2. (40 Points) You are a risk-neutral speculator and have observed the market data given in Problem 1. Suppose that you are planning to engage in an 1,000,000 forward- exchange speculation on March 31, 2022. Answer the following questions? 1. Explain the entire set of your speculative trading strategy that do not involve your own financial fund; in other words, such a strategy may allow you to make a speculative profit at no cost. Note that your trading strategy involves two critical time points, one on March 30,2023 and one three months from now. (20pts) 2. If those speculators correctly predict the future spot exchange rate, what is the profit to result from the the 1,000,000 forward-exchange speculation? ( 10pts ) 3. As a matter of fact, the above-calculated speculative profit is rather risky, subject to how the euro's future spot exchange rate turns out at the foreign-exchange delivery date. Suppose that the euro's future spot exchange rate turns out to be $1.18, in contrast to speculators' prediction of \$1.13. Then can the forward-exchange speculation still be profitable? Show your calculations to support your answer. (10 pts)