Samuel Company raised 1 million USD to invest with the option to either invest at the US risk free rate at 4% or in Germany with a risk free rate of 6%. The current spot rate is USD1.3/Euro. Which statement is correct?

a) Samuel company should invest in the higher rate country but leave the position unhedged

b) The forward rate is 1.2755 making it indifferent between investing in the United States or exchanging USD-Euros instead we can invest in Germany and exchange euros back to USD at the forward rate.

c) If the forward rate is 1.25 then investing in the United States will be better for Samuel Company.