a) Takeshi Kamada, the analyst for Credit Suisse (Tokyo), observes that the $ spot rate has been holding steady, and both dollar and yen interest rates have remained relatively fixed over the past week. Takeshi wonders if he should try to execute a covered interest arbitruge and thereby earn some profits. Using the data in the following table, analyze the potential profits from covered interest arbitrage. Assumptions Value Yen Equivalent Arbitrage funds available $5,000,000 Spot exchange rate SI 118.60 180-day forward rate SI 118.00 180-day (U.S. dollar) interest rate (per annum) 4.8% 180-day (Japanese yen) interest rate (per annum) 3.4% (6 marks) b) Based on information in a), what should be the expected 3-month forward rate that makes covered interest arbitrage not feasible? (4 marks)