Assume the inflation rate in the U.S.is 3.6 percent.The spot rate for a foreign currency is 5.872 while the 3-year forward rate is 6.084.What is the approximate rate of inflation in the foreign country?
A) 4.68%
B) 2.37%
C) 2.42%
D) 2.41%
E) 4.79%
Correct Answer:
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