eidi? Hi Jensen, a foreign exchange trader at J.P. Morgan ?Chase, can invest ?$5 ?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	$	5,000,000
Spot exchange rate (kr/$)		6.1719
3-month forward rate (kr/$)		6.1977
U.S. dollar annual interest rate		3.000	%
Danish krone annual interest rate		4.900	%

The CIA profit potential is ........?%, Should she borrow Danish Krones or US Dollar? Should she invest the Danish Krones or the US Dollar in the higher yielding currency for CIA profit? ? (Round answers to three decimal places .)