Suppose that you are a U$.$S$.-$based importer of goods from the United Kingdom. You expect the value of the pound to increase against the U$.$S$.$ dollar over the next $30$ days. You will be making payment on a shipment of imported goods in $30$ days and want to hedge your currency exposure. The U$.$S$.$ risk$-$free rate is $5\mathrm{.}0$ percent, and the U$.$K$.$ risk$-$free rate is $4\mathrm{.}0$ percent. These rates are expected to remain unchanged over the next month. The current spot rate is $$1\mathrm{.}80.$

Required:

Whether you should use a long or short forward contract to hedge the currency risk.

Calculate the no$-$arbitrage price at which you could enter into a forward contract that expires in $30$ days.

Move forward $10$ days. The spot rate is $$1\mathrm{.}83.$ Intere

Calculate the no$-$arbitrage price at which you could enter into a forward contract that expires in $30$ days.

Note: Do not round intermediate calculations. Round your answer to $4$ decimal places.

No$-$arbitrage price $??????$

Move forward $10$ days. The spot rate is $$1\mathrm{.}83.$ Interest rates are unchanged. Calculate the value of your forward position.

Note: Do not round intermediate calculations. Round your answer to $4$ decimal places.

Forward position??????