Suppose the one-year interest rate in the United States is 9.5%. What would you expect the interest rate to be in the UK if expected inflation is 5.3% in the United States and 7.85% in the UK?

Select one:

a.

5.19%

b.

7.93%

c.

9.08%

d.

11.12%

e.

9.53%

f.

13.62%

g.

12.15%

h.

None of the above