use data from table above.

T ueu lie IUIUWiriy exchange rate and Oupun interest rate quotes. Is CIA profit possible? If so, how? Arbitrage funds available $5,000,000 Spot rate (I$) 118.60 180-day forward rate (\/$) 117.80 180-day U.S. dollar interest rate 4.800% 180-day Japanese yen interest rate 3.400% 6.8 Takeshi Kamada-UIA Japan (B). Takeshi Kamada, Credit Suisse (Tokyo), observes that the /$ spot rate has been holding steady, and that both dollar and yen interest rates have remained relatively fixed over the past week. Takeshi wonders if he should try an uncovered interest arbitrage (UIA) and thereby save the cost of forward cover. Many of Takeshi's research associates--and their computer models-are predicting the spot rate to remain close to 118.00/$ for the coming 180 days. Using the same data as in Problem 6.7 O analyze the UIA potential. 69 Conenhanen Covered (A) Heidi Hai lensen a foreign exchange trader at IPMorgan Chace can invaet