QUESTION 11 Akemi Yamada, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage (CIA) possibilities. She wants to invest $900,000 or its yen equivalent, in a covered interest arbitrage between U.S. dollars and Japanese yen. She faced the following exchange rate and interest rate quotes. Assumptions Value Arbitrage funds available $900,000 Spot rate (\/$) 105.46 180-day forward rate (\/$) 104.75 180-day U.S. dollar interest rate 4.80% 180-day Japanese yen interest rate 3.40% What is the CIA profit potential (%)[to 4-decimal place] the difference in interest rates and the forward discount rate