Assume the following information:

1-year deposit rate offered by U.S. banks =12%

1-year deposit rate offered on Swiss francs =10%

1-year forward rate of Swiss francs =$.62

Spot rate of Swiss franc =$.60

a) An U.S. investor has $1,000,000 to invest (note: the investor uses own money, not borrowed funds). What is the yield to the U.S. investor who conducts covered interest arbitrage?Make sure you show your works step by step and explain your calculations.Does covered interest arbitrage work for the U.S. investor? (10 points in total)