Kamada: CIA Japan (A).Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $5 comma 100 comma 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 $ 5,100,000 Spot rate (/$) 118.48 180-day forward rate (/$) 117.84 U.S. dollar annual interest rate 4.806 % Japanese yen annual interest rate 3.391 % Takeshi Kamada generates a CIA profit of yen nothing by investing in the higher lower interest rate currency, the dollar yen , and simultaneously selling the dollar yen proceeds forward into dollar yen at a forward premium which does not completely negate the interest differential.