12. Yen carry trade with investmcnt in U.S. dollars/lcclandic krna. Louisc is an associate with Charlemagne, a hedge fund domiciled in Luxembourg, who is considering the following arbitrages: Amount of transaction:USS200 million Start date oftransaction: January 1,2008 End date of transaction: November 30, 2008 Term of the transaction: 330 days Two funding alternatives from banks with loanable funds: i. Deutsche Bank, Tokyo-Current interest rate on yen loans: 1.875 percent per annuun ii. JPMorgan Chase Bank NA, New YorkCurrent USS prime interest rate 7.25 percent per annum. January 1, 2008, spot exchange rate: USS1- Y107.74. Trader's view of expected USS versus yen spot exchange rate in 330 days: US$1 = Y107.74. 12. Yen carry trade with investmcnt in U.S. dollars/lcclandic krna. Louisc is an associate with Charlemagne, a hedge fund domiciled in Luxembourg, who is considering the following arbitrages: Amount of transaction:USS200 million Start date oftransaction: January 1,2008 End date of transaction: November 30, 2008 Term of the transaction: 330 days Two funding alternatives from banks with loanable funds: i. Deutsche Bank, Tokyo-Current interest rate on yen loans: 1.875 percent per annuun ii. JPMorgan Chase Bank NA, New YorkCurrent USS prime interest rate 7.25 percent per annum. January 1, 2008, spot exchange rate: USS1- Y107.74. Trader's view of expected USS versus yen spot exchange rate in 330 days: US$1 = Y107.74