XYZ Bank purchased a EUR18 million one-year bond that pays 14 per cent interest annually. The spot rate for euro is 1.62/$.XYZ Bank has funded this investment by accepting a British pound ()-denominated deposit for the equivalent amount and maturity at an annual rate of 12 per cent. The current spot rate of the British pound is $1.63/. a) What is the net interest income earned in dollars on this one-year transaction if the spot rates at the end of the year are 1.72/$ and $1.87/ ? (5 marks) b) What should be the to $ spot rate in order for the bank to earn a net interest margin of 3.8 per cent? ( 2 marks) c) What is the total effect on net interest income and principal of this transaction given the end-of-year spot rates in part (a)