Suppose the value of the Polish zloty moves from Z 1100 = $1 at the start of the year to Z 1750 at the end of the year. At the same time, the Polish price level changes from an index of 100 on January 1 to 128 on December 31. U.S. inflation during the year was 4.2%. If the one-year interest rate on the zloty is 46%, what was the real dollar cost of borrowing the zloty during the year?

a.

-11.93%

b.

17.53%

c.

27.81%

d.

-8.76%