Currently, the spot exchange rate is 1.50 USD/GBP and the three-month forward exchange rate is 1.503 USD/GBP. The three-month interest rate is 5.0% per annum in the U.S. and 2.0% per annum in the UK. Assume that you can borrow as much as $1,500,000 or 1,000,000

a) What is the implied three-month U.S. per annum interest rate?

b)Does Interest Rate Parity hold? (sidenote how and why?)

c)Determine the arbitrage profit (if any, otherwise type "0") and report it in the currency in which you borrow. Remember that you should have a three month investment horizon.