If the forecast UK inflation rate is 5% and the forecast European inflation rate is 2% and the spot exchange rate is 1.20/1. Then according to relative PPP which of the following statements is correct? Select one: a. The pound is forecast to depreciate by 3% to approximately 1.1650/1 b. The euro is forecast to appreciate by 3% to approximately 1.236/1 c. The euro is forecast to depreciate by 3% to approximately 1.1650/1 d. The pound is forecast to appreciate by 3% to approximately 1.236/1 If the forecast UK inflation rate is 5% and the forecast European inflation rate is 2% and the spot exchange rate is 1.20/1. Then according to relative PPP which of the following statements is correct? Select one: a. The pound is forecast to depreciate by 3% to approximately 1.1650/1 b. The euro is forecast to appreciate by 3% to approximately 1.236/1 c. The euro is forecast to depreciate by 3% to approximately 1.1650/1 d. The pound is forecast to appreciate by 3% to approximately 1.236/1