Indonesia is a large Asian oil producer. Its currency is the Rupiah. The interest rate on one year deposits is twenty-two percent (0.22). The interest rate is two percent (0.02) in the US. The exchange rate is 1.0 it costs one dollar to buy one Rupiah. Throughout you should treat the Rupiah as the home currency. What do you expect the exchange rate with the dollar to be one year from now?

a)1.10

b)1.0

c)1.2

d)0.9