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please help me with this question. The question on Chegg is not correct. ...

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Finance

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please help me with this question.

The question on Chegg is not correct.

1. (5 Points You are given the following information: U.S. Germany Nominal one year interest rate 3% 5% Spot rate $1.09 Singapore 7% $0.70 Interest rate parity exists between the U.S. and Germany as well as the U.S. and Singapore. The international Fisher effect exists between the U.S. and Jermany as well as the U.S. and Singapore. Jack (based in the U.S.) invests in a one-year CD (certificate of deposit) in Germany and sells euros one year forward to cover his position. Olivia (based in Germany) invests in a one-year CD in Singapore and does not cover her position. What are the returns on funds invested for Jack and Olivia respectively? Please justify your explanation both in terms of theory and calculations. (Hint: You can get the exchange rate between euro and Singapore dollar from their respective rate to USD.) ANS: Please clearly label your return calculations, i.e., the investment return for Jack and Olivia respectively

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