Casper Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has

$1.11.1

million (or its Swiss francequivalent) for a short term money market investment and wonders if he should invest in U.S. dollars for three months, or make a CIA investment in the Swiss franc. He faces the following quotes:

Arbitrage funds available	$	1,100,000
Spot exchange rate (SFr/$)		1.2806
3-month forward rate (SFr/$)		1.2743
U.S. Dollar annual interest rate		4.797	%
Swiss franc annual interest rate		3.203	%

The CIA profit potential is

__%,

which tells Casper Landsten he should borrow

Swiss francs

U.S. dollars

and invest in the

higher

lower

yielding currency, the

Swiss franc

U.S. dollar

, in order to earn covered interest arbitrage (CIA) profits.(Round to three decimal places and select from the drop-down menus.)The CIA profit amount is

$nothing.

(Round to the nearest cent.)