ITUDIUNTUT uiguuTLI TV) Kamada: CIA Japan (A). Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $4,900,000 or its yen equivalent, in a covered interest arbitrage between U.S. dollars and Japanese yen. He faced the following exchange rate and interest rate quotes. Is CIA profit possible? If so, how? $ Arbitrage funds available Spot rate ($) 180-day forward rate (/$) U.S. dollar annual interest rate Japanese yen annual interest rate 4,900,000 118.43 117.83 4.806 % 3.399 % V and invest in the higher yielding currency, V, to lock in a covered interest arbitrage (CIA) profit. The CIA profit potential is %, which tells Takeshi Kamada that he should borrow (Round to three decimal places and select from the drop-down menus.)