16. Ana Smith does not believe that the international Fisher effect (IFE) holds. Current one-year interest rates in Europe are 12 percent, while one-year interest rates in the U.S. are 5 percent. Ana converts $100,000 to euros and invests them in France. One year later, she converts the euros back to dollars. The current spot rate of the euro is $1.28. If the spot rate of the euro in one year is $1.08, what is Anas percentage return from her strategy? (Points : 3.5)

8.15% -5.50% -94.50% 108.15% None of the above

Question 17. 17. Continued from Question 16, what must the spot rate of the euro be in one year for Ana's strategy to be successful? (Points : 3.5)

The spot rate must be above $1.08 per euro. The spot rate must be above $1.20 per euro. The spot rate must be below $1.20 per euro. The spot rate must be below $1.08 per euro.