The spot rate of the Hong Kong dollar is given as A$0.1825 and the 180 day forward rate of the Hong Kong dollar is A$0.1805. The 180 day Hong Kong interest rate is 1.7% and the 180 day Australian dollar interest rate is 0.5%.

a. Determine the yield to Hong Kong investors who attempt covered interest arbitrage, with HK$1,000,000 as the initial investment.

b. Using your answer to (a), is covered interest arbitrage worthwhile for Hong Kong investors who have Hong Kong dollars to invest? Explain your answer.

c. Explain briefly why the Hong Kong dollar is a pegged currency to the United States dollar.