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In London, interest paid on pounds is 1.11%. In New york,interest paid on dollars is 3.27%. The Spot rate is $1.5512/ pound.The One year forward rate is $1.5529/ Pound. The spread onborrowing & lending rates is zero. The bid ask spread is Zero.The arbitrageur has no money of his own but can borrow up to1,000,000 of any local currency. A. what is the covered yield ondollars( if the investor borrows pounds in London) and coveredyield on pounds( if the investor borrows dollars in New york) B.Identity the steps and timing of this covered interest arbitrage,and compute the amounts involved at each state (including the gainat the end). C. The ROA is very low. How does an arbitrageur createacceptable ROE from covered interest arbitrage?