The current spot exchange rate is ¥120/$ and the six-month forward rate is ¥115/$. Suppose you are a Japan-based investo

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The current spot exchange rate is ¥120/$ and the six-month
forward rate is ¥115/$. Suppose you are a Japan-based investor who
is confident that the spot exchange rate will be ¥110/$ in six
months. (a) (4 points) Based on your expectation, would you rather
buy or sell US$1,000,000 forward? What is the expected profit in ¥
from your speculation? (b) (6 points) Draw a profit/loss profile
for your investment. The label on the graph the exchange rates of
¥120/$, ¥115/$, ¥110/$, and your total profit or loss associated
with each of these exchange rates. Please also label the axes of
the graph.