Consider the following prices from two different banks: 90-day ¥ deposits/loans: 1.2% – 1.6% p.a. 90-day CAD deposits/lo

[answerhappygod]

Consider the following prices from two different
banks:
90-day ¥ deposits/loans:
1.2% – 1.6% p.a.
90-day CAD deposits/loans:
2.4% – 2.8% p.a.
Spot exchange rates:
¥90 / CAD – ¥92 / CAD
90-day forward exchange rates:
¥80 / CAD – ¥85 / CAD
The earlier quote is a bid rate and the latter quote is
an asked rate. The dealer has ¥1,000 for investment. Can the dealer
do a covered interest arbitrage? In what currency are you going to
invest? Provide details.