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Assume that the U.S. one-year interest rate is 5% and the one-year interest rate on euros is 8%. You have S100,000 to invest and you

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Assume that the U.S. one-year interest rate is 5% and the one-year interest rate on euros is 8%. You have S100,000 to invest and you believe that the international Fisher effect (IFE) holds. The euro's spot exchange rate is S1.40. What will be the yield on your investment if you invest in euros? a. 8% b. 5% c. 390 d. 2.78%

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