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Copenhagen Covered (B). Heidi Hri Jensen, a foreign exchange trader at J.P. Morgan Chase, can invest $4.95 million, or the foreign currency equivalent of the

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Copenhagen Covered (B). Heidi Hri Jensen, a foreign exchange trader at J.P. Morgan Chase, can invest $4.95 million, or the foreign currency equivalent of the bank's short term funds, in a covered interest arbitrage with Denmark. She is now evaluating the arbitrage profit potential in the same market after interest rates change. (Note that anytime the difference in interest rates does not exactly equal the forward premium, it must be possible to make CIA profit one way or another.) The CIA profit potential is 0.628%, which tells Heidi that she should borrow and invest in the interest rate currency, the dollar , gaining on the re-exchange of dollars for krone at the end of the period. (Round to three decimal places and select from the drop-down menus.) The ClA profit amount is kr (Round to two decimal places.)

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