Questions 35-39 are based on the following information: In October 2013, there is a consensus in the capital market that the annual inflation rate is likely to be 3.5% in US and 1.5% in China for the next two years. Based on this information, answer the following questions regarding your prediction on foreign exchange rate. Chinese Yuan will be selling at a forward (premium/discount). The size of the forward premium/discount is \%. Use approximate version of parity relationships. (2 points)