. Kazuma Matsumoto, a foreign exchange trader in Japan, has JPY 50,000,000 for short-term money market investment and wants to make profit based on the following rates. Explain specific steps that Kazuma must take to make a covered interest arbitrage. State your answer in JPY.
3-month Germany interest rate: 2.85% per annum
3-month Japan interest rate: 1.5% per annum
Spot rate: JPY 125.9100/EUR
3-month Forward Rate JPY 126.8500/EUR