a) The following information is given to an Australian hedge fund. The fund currently has A$10m sitting in a current account, thus is considering to deploy this amount of money in short term. Would the fund be able to make profits from covered interest arbitrage?

	Bid quote	Ask quote
NZ$ Spot	A$0.9216	A$0.9286
One-year NZ$ Forward	A$0.9304	A$0.9374
	Deposit rate	Loan rate
In Australia (on A$)	1%	2.5%
In New Zealand (on NZ$)	1.5%	2.5%

b) Would the hedge fund still benefit from this arbitrage if it has to borrow in Australia to make investment instead of using its own fund?