START END 0. N. M A. a. 1 C * . 1 E f. Simon Baker, Lehman Brother Investment Bank (Tokyo) observes that the /$ spot rate has been holding steady, and both dollar and yen interest rates have remained relatively fixed over the past week. Simon wonders it he should try an uncovered interest arbitrage (UIA) and thereby save the cost of torward cover. Many of Simon's research associates and their computer models are predicting the spot rate to remain close to 227/$ for the coming 180 days. Using the same data as in problem 2. analyze the UIA potential. Arbitrage Funds Available Spot Exchange Rate (X/S) 180-day Forward Rate (/S) 180-day US dollar interest rate 180-day Danish Kronerinterest rate $4,300.000 228.45 207:34 4.3000% 3.B000% START END 0. N. M A. a. 1 C * . 1 E f. Simon Baker, Lehman Brother Investment Bank (Tokyo) observes that the /$ spot rate has been holding steady, and both dollar and yen interest rates have remained relatively fixed over the past week. Simon wonders it he should try an uncovered interest arbitrage (UIA) and thereby save the cost of torward cover. Many of Simon's research associates and their computer models are predicting the spot rate to remain close to 227/$ for the coming 180 days. Using the same data as in problem 2. analyze the UIA potential. Arbitrage Funds Available Spot Exchange Rate (X/S) 180-day Forward Rate (/S) 180-day US dollar interest rate 180-day Danish Kronerinterest rate $4,300.000 228.45 207:34 4.3000% 3.B000%