GIVEN: 1,000,000 (EUR, Euro) invest in US w/ current spot XR = US$ 1.18/ and 3-month US APR = 2%

1- What is the expected EFFECTIVE Annual Return on the US investment:

2- Convert the Euros, determine the dollar amount after the three months, and translate the dollars back into Euros at a future SPOT rate of XR = US$ 1.12/:

3-What did the investor earn in Euros for the three month period annualized on a simple interest basis:

4-What did the investor earn in Euros for the three month period annualized on a compound interest basis:

5-Which currency appreciated?