Assume that interest rate parity holds, and the euro's interest rate is 5 percent while the U.S. interest rate is 8 percent. Then the euro's interest rate increases to 11 percent while the U.S. interest rate remains the same. As a result of the increase in the interest rate on euros, the euro's forward ____ will ____ in order to maintain interest rate parity.

a. discount; increase

b. discount; decrease

c. premium; decrease

d. premium; increase