I am supposed to solve this: czech investor has 1 000 000 Czech crowns available. Exchange rate is 27 Czech crowns / 1€. Interest rate in a czech bank is 3% and 6% in a German bank. Investor expects, that exchange rate will be 30 Czech crowns / 1 € next year. Where is it more profitable for investor to save money?
My answer is that in Germany, because in Germany he will receive 1177777.778 Czech crowns and in Czech republic he will receive 1030000 Czech crowns.