Kamada: CIA Japan (A). Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $4,950,000 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? $ 4,950,000 Arbitrage funds available Spot rate ($) 180-day forward rate ($) 118.43 117.83 U.S. dollar annual interest rate 4.809 % Japanese yen annual interest rate 3.393 % to lock in a The CIA profit potential is - .398 %, which tells Takeshi Kamada that he should borrow the Japanese yen and invest in the higher yielding currency, the U.S.dollar covered interest arbitrage (CIA) profit. (Round to three decimal places and select from the drop-down menus.) proceeds forward into at a Takeshi Kamada generates a CIA profit of by investing in the interest rate currency, the and simultaneously selling the forward premium which does not completely negate the interest differential. (Round to two decimal places and select from the drop-down menus.) Enter your answer in the answer box and then click Check Answer. Kamada: CIA Japan (A). Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $4,950,000 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? $ 4,950,000 Arbitrage funds available Spot rate ($) 180-day forward rate ($) 118.43 117.83 U.S. dollar annual interest rate 4.809 % Japanese yen annual interest rate 3.393 % to lock in a The CIA profit potential is - .398 %, which tells Takeshi Kamada that he should borrow the Japanese yen and invest in the higher yielding currency, the U.S.dollar covered interest arbitrage (CIA) profit. (Round to three decimal places and select from the drop-down menus.) proceeds forward into at a Takeshi Kamada generates a CIA profit of by investing in the interest rate currency, the and simultaneously selling the forward premium which does not completely negate the interest differential. (Round to two decimal places and select from the drop-down menus.) Enter your answer in the answer box and then click Check