Assume the spot exchange rate is £.7024.The expected inflation rate in the United Kingdom is 1.8 percent and in the United States it is 2.4 percent.What is the expected exchange rate 3 years from now if relative purchasing power parity exists?
A) £.6871
B) £.6898
C) £.6962
D) £.7066
E) £.7151
Correct Answer:
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