Suppose (1+i)ef < (1+i*)e where ef and e represent forward (a year from now) and spot exchange rates and i and i* represent the interest rates on domestic currency and the interest rate on foreign currency, respectively.

Suppose (1+i)e^f < (1+i*)e where e^f and e represent forward (a year from now) and spot exchange rates and i and i* represent the interest rates on domestic currency and the interest rate on foreign currency, respectively.

If the forward rate for six months from now is equal to e + (e^f – e)/2, which of the following will guarantee higher returns a year from now?