Q1 You have $500 to invest in either a Canadian Bank or in a German bank and wish to take advantage of the best opportunity for your investment. Provide your solutions to the undermentioned options showing all calculations using the following information. Spot exchange rate today Cdn$/Euro 1.2530. Forward exchange Rate Cdn$/Euro at the end of the year 1.2450. Interest rate Canada 5.00% and Germany 6.00%.

1) If you choose to invest in Canadian Bank

2) If you choose to invest in a German Bank

3) Which is the best alternative

Q2 You are considering a substantial investment in a major corporation and need to determine which option has the most advantages. Assume that interest rates are currently stable and there is no unusual market volatility being prevalent in todays equity markets. Compare and contrast your investment advantages and disadvantages of a medium term (3/% years) bond purchase or an equity purchase.