A U.S. firm has excess funds to invest in money market securities for one year. If interest rate parity exists and a U.S. firm expects that the one-year forward rate of the Swiss franc to underestimate the future value of the Swiss franc in one year, then covered interest arbitrage _______worthwhile; if the firm invests in a deposit denominated in Swiss francs without covering its exchange rate risk, the effective yield is expected to be ___the U.S. interest rate.

a. Is; lower than

b. is not; higher than

c. is; higher than

d. is not; lower