Please consider the information below and then answer the following question.

Current spot rate (Argentine Peso=ARS) ARS 14.16/$

Three month forward rate ARS 14.22/$

Annual U.S. interest rate 1.5 percent

Annual Argentine interest rate 5.6 percent

Annual U.S. inflation rate 2.0 percent

The expected next years forecast of ARS, based on international Fisher effect, is:

Choose from the options below

Depreciation of ARS about 4.1 percent

Appreciation of ARS about 4.8 percent

Depreciation of ARS about 5.6 percent

Appreciation of ARS about 2.0 percent

Appreciation of ARS about 2.8 percent