The Swiss economy is predicted to average inflation at 3 percent per year. The inflation forecast for the United States is 4 percent per year. If the interest rate in Switzerland is 7%, what must be the interest rate in the US? a. 6% b. 7% c. 8% d. none of the above ANS C Use the Fisher effect solve for r$ with more inflation the interest rate in the US should increase (you want to be more compensated in terms of real interest rate) If the interest rate in Switzerland is 7%, and 6% in the US, and the current exchange rate is 1.4SF/$, what must be the forward rate one year from now? a. 1.400SF/$ b. 1.413SF/$ c. 1.387SF/$ d. none of the above ceri