Suppose that the one$-$year interest rate is $5\mathrm{.}0$ percent in the United States and $3\mathrm{.}5$ percent in Germany, and that the spot exchange rate is $$\frac{1\mathrm{.}12}{}$ and the one$-$year forward exchange rate, is $$\frac{1\mathrm{.}16}{}.$ Assume that al of these rates will be used and a speculator can borrow $$1,000,000$ or $1,000,000.$

This is an example whether Uncovered Interest Arbitrage is possible

This is an example of whether Purchasing Power Parity holds

This is an example whether fisher effect holds

None of the above

This is an example whether Covered Interest Arbitrage is possibleC