Chase Econometrics has just published projected inflation rates for the United States and Euro-zone for the next five years. U.S. inflation is expected to be 2% per year, and Euro-zone inflation is expected to be 3.5% per year. If the current exchange rate is 1.4500 $ per €, what should the expected PPP implied EUR/USD exchange rates be five years from now?
a
1.3479
b
1.5597
c
1.4289
d
1.4713