SUPPOSE THAT DOMESTIC INFLATION IS 3%; INFLATION IN € IS 6% AND TH...

14. Suppose that domestic inflation is 3%; inflation in € is 6% and the spot exchange rate is €1 = $2. What is your estimate of the exchange rate expected to prevail in 3 years? a. €1 = $2.1855 b. €1 = $2.00 c. €1 = $1.8349 d. €1 = $1.9434 e. None of the above