Assume That International Capital Markets Are Competitive and That Global

Assume that international capital markets are competitive and that global real interest rates are the same. The one-year interest rate is 9 percent in the United States and 5 percent in Switzerland. If the expected inflation rate is 6 percent in the United States, what is the expected inflation rate in Switzerland?

A) 5 percent
B) 4 percent
C) 3 percent
D) 2 percent