Kamada: CIA Japan (A). Takeshi Kamada, a foreign exchange trader at Credit Suisse (Tokyo), is...
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Kamada: CIA Japan (A). Takeshi Kamada, a foreign 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? The CIA profit potential is %, which tells Takeshi Kamada that he should borrow and invest in the higher yielding currency, to lock in a covered interest arbitrage (CIA) profit. (Round to three decimal places and select from the drop-down menus.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.)
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