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Copenhagen Covered​ (A). Heidi​ Høi Jensen, a foreign exchange trader at J.P. Morgan​ Chase, can invest...

Copenhagen Covered​ (A). Heidi​ Høi Jensen, a foreign exchange trader at J.P. Morgan​ Chase, can invest ​$4.9 ​million, or the foreign currency equivalent of the​ bank's short term​ funds, in a covered interest arbitrage with Denmark. Using the following​ quotes, can Heidi make a covered interest arbitrage​ (CIA) profit?

Arbitrage funds available

$

4,900,000

Spot exchange rate (kr/$)

6.1719

3-month forward rate (kr/$)

6.1984

U.S. dollar annual interest rate

2.950

%

Danish krone annual interest rate

5.100

%

The CIA profit potential is _____%, which tells Heidi​ Høi Jensen that she should borrow (Danish Krones or USD) and invest in the higher yielding currency the (Danish Krones or USD)​, for CIA profit. ​ (Round to three decimal place)

Heidi​ Høi Jensen generates a covered interest arbitrage​ (CIA) profit of _____$ (Round to the nearest​ cent.)

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