Let Expected Inflation in the United States Be 5 Percent

Let expected inflation in the United States be 5 percent with a nominal rate of interest equal to 10 percent; let corresponding inflationary expectations abroad equal 10 percent with a nominal interest rate of 12 percent. According to interest rate parity,

A) people must expect the dollar to appreciate by 3 percent.
B) people must expect the dollar to appreciate by 5 percent.
C) people must expect the dollar to appreciate by -3 percent.
D) people must expect the dollar to appreciate by -5 percent.
E) expectations about the future strength of the dollar must still be undetermined.