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Suppose the spot exchange rate for the Hungarian forint is HUF 203.62. The inflation rate in the United States will be 1 percent per year.

Suppose the spot exchange rate for the Hungarian forint is HUF 203.62. The inflation rate in the United States will be 1 percent per year. It will be 4.0 percent in Hungary.

a.

What do you predict the exchange rate will be in one year? (Round your answer to 2 decimal places, e.g., 32.16.)

b. What do you predict the exchange rate will be in two years? (Round your answer to 2 decimal places, e.g., 32.16.)
c. What do you predict the exchange rate will be in five years? (Round your answer to 2 decimal places, e.g., 32.16.)

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