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

$4.9

million, 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	$	4,900,000
Spot exchange rate (kr/$)		6.1722
3-month forward rate (kr/$)		6.1983
U.S. dollar annual interest rate		2.900	%
Danish krone annual interest rate		5.050	%

Part 1

The CIA profit potential is ?????%, which tells Heidi Hi Jensen that she should borrow ??? and invest in the higher yielding currency the ???, for CIA profit.

Round to three decimal places.