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 (/$)		118.60
180-day forward rate (/$)		117.80
U.S. dollar annual interest rate		4.800	%
Japanese yen annual interest rate		3.400	%

The CIA profit potential is

nothing%,

which tells Takeshi Kamada that he should borrow

the Japanese yen

the U.S. dollar

and invest in the higher yielding currency,

the Japanese yen

the U.S.dollar

, to lock in a covered interest arbitrage (CIA) profit.(Round to three decimal places and select from the drop-down menus.)