The annual interest rate in the AUS (currency is $) and UK (Currency is £) are 5% and 8% respectively. The current spot rate is $1.72/£ and the 1-year forward rate is $1.70/£. Required (i) Based on Interest Rate Parity theory, what should be the Forward Rate? Is there an arbitrage opportunity from the position of an Australian? (ii) Assume that you have 1 million AUS$. Compute the potential profit that you can make in (i) above.