Problem 2: Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $5,000,000 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. Assumptions Value Yen Equivalent Arbitrage funds available $5,000,000 594,000,000 Spot rate (#/S) 118.80 180-day forward rate (/$) 117.60 180-day U.S. dollar interest rate (per annum) 5.800% 180-day Japanese yen interest rate (per annum) 3.400% Show how Takeshi can profit from this situation using covered arbitrage strategy and calculate his profit