Assume the inflation rate in the U.S.is 1.8 percent.The spot rate for a foreign currency is .876 while the 1-year forward rate is .871.What is the approximate rate of inflation in the foreign country?
A) 1.23%
B) 2.37%
C) 1.49%
D) 1.63%
E) 2.04%
Correct Answer:
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