6.7 Kamada: CIA Japan (A). Takeshi Kamada, a for- eign 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 Is CIA profit possible? If so, how? Arbitrage funds available $5,000,000 Spot rate (Y/$) 118.60 180-day forward rate (/S) 117.80 180-day U.S. dollar interest rate 4.800% 180-day Japanese yen interest rate 3.400%