Currently, you can exchange 100 for $126.48. The inflation rate in Euroland is expected to be 2.8 percent as compared to 3.4 percent in the U.S. Assuming that relative purchasing power parity exists, the exchange rate 4 years from now should be:

Select one:

a.

1.2497/$1

b.

.7718/$1

c.

1.1414/$1

d.

.7827/$1

e.

.7811/$1