Suppose the spot exchange rate be $1.45 per euro, the interest rate on one-year euro-denominated German government bond is 2%, and the expected future spot rate be $1.50 per euro. At the same time, the interest rate on dollar-denominated US government bond with the same maturity is 3%. a. Calculate the expected dollar return on the German government bond. b. Does your answer in Part (a) imply free capital mobility between the US and Germany? Explain your reasoning. c. Suppose both governments implement financial liberalization to achieve free capital mobility. Will the US receive capital inflows from Germany? Explain your reasoning. d. Suppose both governments implement financial liberalization to achieve free capital mobility, and government bonds interest rate remain unchanged. Calculate the spot exchange rate that is consistent with financial liberalization, given no change in the expected future spot rate. e. Suppose both governments implement financial liberalization to achieve free capital mobility. However, the US government is willing to raise its bond interest rate to 4%, while the German government continues to keep its bond interest rate at 3%. Calculate the spot exchange rate that is consistent with financial liberalization, given no change in the expected future spot rate