Assume a US saver with $1,000 to place in a domestic or European bank CD.
The interest rate for US and European savings equals 4%.
Saving time period = 1 year
E = $1.00 (dollars per euro)
F = $1.02 (dollars per euro)
If the saver keeps her money in the US, her return equals ____. If the saver moves her money to Europe with a forward taken out at the time of purchase, her total return equals ____:
A. 4%, 6%.
B. 6%, 4%.
C. 4%, 4%.
D. 4%, 2%.