Use the data below to decide whether dollar-denominated assets would be preferred by investors to euro-denominated assets. Make your comparison explicit. The time horizon is one year. Assume all assets are free of default risk.

Dollar-denominated assets

i_$ = .04

Euro-denominated assets

i = .06

E_/$ = .95/$ (spot price of dollar)

E^e = .99/$(expected future spot price of dollar, one year from now)