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Suppose the year 1 , year 2 and year 3 forecasts for the rate of inflation in Denmark are 3 and 5 respectively. Suppose also

image text in transcribed Suppose the year 1 , year 2 and year 3 forecasts for the rate of inflation in Denmark are \3 and \5 respectively. Suppose also that the year 1 , year 2 and year 3 forecasts for the rate of inflation in France are \11 and \8 respectively. If the expected spot rate between the Danish Krone (DKK) and the EUR is EUR0.1344/DKK at the end of year 3 , what is the current spot rate? a. EUR0.119024/DKK b. EUR0.151762/DKK c. EUR0.128269/DKK d. EUR0.111027/DKK e. Not enough information to answer this

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