The Swiss economy is predicted to average inflation at 4 percent per year. The inflation forecast for the United States is 6 percent per year. If the current exchange rate is 1.4SF/$, what should be the expected exchange rate one year from now in order to avoid arbitrage? a. 1.4SF/$ b. 1.427SF/$ c. 1.373SF/$ d. none of the above ANS C Use PPP solve for E (SF/$) with less inflation the SF increases compared to the $