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Question 2 (20 marks) Karman Leung is a French investor with EUR862,000 cash on hand. She was told by a financial advisor today the following exchange rates and interest rates information: Three-month Euro (EUR) interest rate = 1.82% p.a. Three-month US dollar (USD) interest rate = 3.64% p.a. EUR/USD spot exchange rate: US$1.1500 = EUR 1.0000 Three-month EUR/USD forward exchange rate: US$1.2100 = EUR1.0000 a Assume that Karman puts the money into a three-month EUR time deposit. Determine the total amount Karman will receive after three months. (4 marks) b Assume that Karman converts her EUR cash into USD with today's spot rate instead and places the converted sum into a three-month USD time deposit. Determine the total amount Karman will receive upon maturity. (6 marks) c Compute the EUR value of the USD proceeds you calculated in part (b) using the three-month EUR/USD forward rate as the exchange rate. (4 marks) d What will you suggest to Karman for maximizing gain? Should she invest in EUR or USD? Explain your answer. (6 marks)