# Question: Suppose that the interest rates in the U. and Germany are equal to 5%, that the forward (one year) value of the is F$/ = 1$/ and that the…

**Question:**Suppose that the interest rates in the U.S. and Germany are equal to 5%, that the forward (one year) value of the € is F$/€ = 1$/€ and that the spot exchange rate is E$/€ = 0.75$/€.

Does the covered interest parity condition hold

How could I make a **riskless profit** without any money tied up assuming that there are **no** transaction costs in buying and or selling foreign exchange Please help. thank you