x=2

2. Kemalettin Tugcu, a foreign exchange trader at Bank of America, can invest $1x million, or the foreign currency equivalent of the bank's short term funds, in a covered interest arbitrage with Turkey. Using the following quotes can Kemalettin make covered interest arbitrage (CIA) profit? If yes, how much is the profit? (25 pts) Assumptions Value Arbitrage funds available $1x000000 Spot exchange rate (TL/S) 8.17x0 6-month forward rate (TL/$) 8.6x10 US dollar interest rate 2.000% Turkish lira interest rate 15.000%