If a similar US dollar denominated bond yielded 6.0%, which bond has the higher yield after inflation? Is the difference less than .2%? Assume the current spot is $1.2200/E and one-year forward is $1.2450/E. Show work.
a. US Bond, no
b. US Bond, yes
c. Euro Bond, no
d. Euro Bond, yes
e. Can't tell, we can't compute depreciation