1.2.5 Points) You are given the following information: Nominal one year interest rate Spot rate U.S. | 5% France 6% $1.16 Japan 7% $0.008 Interest rate parity exists between the U.S. and France as well as the U.S. and Japan. The international Fisher effect exists between the U.S. and France as well as the U.S. and Japan. Bill (based in the U.S.) invests in a one-year CD (certificate of deposit) in France and sells euros one year forward to cover his position. Erica (based in France) invests in a one -year CD in Japan and does not cover her position. What are the returns on funds invested for Bill and Erica respectively? Please justify your explanation both get the exchange rate between euro and Japanese Yen from their respective rate to USD) in terms of theory and calculations. (2.5 points) (Hint: You can ANS: Please clearly label your return calculations, i.e., the investment return for Bill and Erica respectively