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12 But you cant solve 12 unless you get 11 ans i got for 11 is -0.044 Akemi Yamada, a foreign exchange trader at Credit
12 But you cant solve 12 unless you get 11 ans i got for 11 is -0.044 Akemi Yamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage (CIA) possibilities. She wants to invest $900,000 or its yen equivalent in a covered interest arbitrage between U.S. dollars and Japanese yen. She faced the following exchange rate and interest rate quotes. Assumptions Value Arbitrage funds available $900,000 Spot rate (1/8) 105.46 180-day forward rate (4/5) 104.75 180-day U.S. dollar interest rate 4.80% 180-day Japanese yen interest rate 3.40% What is the CIA profit potential (%) [to 4-decimal place) the difference in interest rates and the forward discount rate? 6,292.35 QUESTION 12 Based on the information above (Question 11 on CIA), which currency should she borrow? Yen Dollar Swiss Franc Euro QUESTION 13 2 Based on the question above (Question 11 on CIA), what is her profit (arbitrage gain)
ans i got for 11 is -0.044
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