The interest rate for Swiss Franc is i_SF=12% and for Japanese yen is i=10%. The expected inflation rate in Switzerland for the next year is 5%. According to the International Fisher Effect, the expected inflation rate and real interest rate in Japan for next year are respectively,

Select one:

a. 2.1% and 4.1%

b. 3.5% and 7.0%

c. 3.1% and 6.7%

d. 2.0% and 5.0%

e. 7.0% and 7.0%