Copenhagen Covered (A). Heidi Hi Jensen, a foreign exchange trader at J.P. Morgan Chase, can invest

$5.1million, or the foreign currency equivalent of the bank's short term funds, in a covered interest arbitrage with Denmark. Using the following quotes, can Heidi make a covered interest arbitrage (CIA) profit?

Arbitrage funds available	$	5,100,000
Spot exchange rate (kr/$)		6.1716
3-month forward rate (kr/$)		6.1977
U.S. dollar annual interest rate		3.100	%
Danish krone annual interest rate		5.050	%

The CIA profit potential is _____ % which tells Heidi Hi Jensen that she should borrow ______(Danish krones or U.S. dollars) and invest in the higher yielding currency the ________ (Danish krone U.S. dollar) for CIA profit.

Heidi Hi Jensen generates a covered interest arbitrage (CIA) profit of

$______________________________

(Round to the nearest cent.)

Please show work