D) "0.0738/F# ch 8 points (4 points per section) 12. Money and foreign exchange markets in Frankfurt are very efficient. The following information is available: New York Frankfurt Spot exchange rate $1.3267/euro $1.3267/euro One-year Treasury bill rate 5.50% 6.4% Expected Inflation rate 2.5% 3.07 7 3.020 T What do financial markets suggest for inflation in Europe next year? 3.4 lo Estimate the expected spot exchange rate between the dollar and the culo in one year. unknown 3.4. e IARN = tko ei - 1.055 1.064 * 1.3267% e = 1,31548/