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Copenhagen Covered (A). Heidi Hol Jensen, a foreign exchange trader at JP Morgan Chase, can invest $5 1 million, or the foreign currency equivalent of

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Copenhagen Covered (A). Heidi Hol Jensen, a foreign exchange trader at JP Morgan Chase, can invest $5 1 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 5 5.100.000 Spot exchange rate (kr/s) 6.1715 3-month forward rate (1/5) 6.1978 Copenhagen Covered (A), Heidi Hoi Jensen, a foreign exchange trader at JP Morgan Chase, can Invest 65.1 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) prodit? Arbitrage funds available $ 5,100,000 Spot exchange rate (kr/5) 6.1715 3-month forward rate (kr/5) 6 1978 US dollar annual interest rate 3.000% Danish Krone annual interest rate 4.900 % The CIA profit potentials 203 % which tells Holdi Hoi Jensen that the should borrow US dollars and invest in the higher yielding currency the Danish krone for CIA profit (Round to three decimal places and select from the drop down menus) Heidi Hul Jensen generate a covered interest arbitrage (CIA) projets (Round to the nearest cont.) 10/10 0/12

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