Q-6: Takeshi, a foreign exchange trader at HSBC (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $7,500,000 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 Arbitrage funds available Value $7,500,000 Spot rate (V/S) 118.60 117.80 180-day forward rate (W/S) 180-day U.S. dollar interest rate 180-day Japanese yen interest rate 4.800% 3.400%