Consider a Dutch investor with 1,000 euros to place in a bank deposit in either the Netherlands or the UK. The interest rate on bank deposits is 2% in the UK and 4% in the Netherlands. If the current spot exchange rate E€/£ = 1.5 and the current one-year forward rate is F€/£ = 1.575, which of the following is TRUE?"
a. The investor should deposit in the UK for higher returns.
b. The investor should deposit in the Netherlands for higher returns.
c. The investor will earn the same returns in both countries.
d. The forward rate indicates no impact on investment decisions.