Given the following information, assess in detail whether covered interest arbitrage is possible for U.S. investors based
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Given the following information, assess in detail whether covered interest arbitrage is possible for U.S. investors based on the following information. What is the dollar profit and % yield for the U.S. investor attempting to conduct covered interest arbitrage in Japan?
Funds available for U.S. investor US$500,000
Funds available for Japanese investor Yen 5,000,000
1-year interest rate in U.S. 11%
1-year interest rate in Japan 6%
1-year forward rate of Japanese yen US$0.0100
Spot rate of Japanese yen US$0.0092
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