I want only Q.1

I want you to fix this according to professor feedback

Q.1 Jack (US Based Investor) Interest rate Parity theory says, if one country is having low rate of interest and other is having high rate of interest, even though there is difference in Interest rate between the countries "the Interest Rate Parity Theory" will neutralize the interest rate differences. Below I have Explained with an Example. Please refer. Jack is having USD 100000 and if he invests in US it will generate cash flow of USD 103000 in one year. If Jack Invest same USD in Germany i.e. Certificate of Deposit. He will convert USD 100000 to Euro, i.e. USD 100000/1.09 = 91743.11 Euro and invest @ 5% in Germany * No. You have the concept misunderstood. You do not get the forward rate by this reasoning. You get the forward rate by IRP, Same will generate Cash flow of Euro 96330.27 which is stated in the solution guide. You then calculate the return to show that IRP makes the covered interest arbitrage infeasible. The Parity theory says, this interest rate differences will be offset by exchange rate, Therefore, the USD would have become, or Forward USD will be.. USD103000/EURO96330.27 = USD 1.06923 Jack will get USD 103000, by selling Euro 96330.27 @ 1.06923. Therefore, Asper Interest Parity Theory "differences in Interest rate between the countries would not bring "Risk". Case II...Olivia. Same above theory cab applied to Olivia and can be invested in Singapore even though there is an interest difference 1. No. Olivia does not cover her foreign investment, so the forward rate is not applied. Q.2 2. Also, in Olivia's scenario, you'll have to obtain the current exchange rate Spot rate = $0.72/CAD between euro and Singapore dollar first. And you will have to find out the exchange rate between euro and Singapore dollar one year later using IFE 3. You have to show me the Olivia's return explicitly, thus showing how IFE rl: interest rate in US = 3.5% will make the arbitrage opportunities disappeared