Multiple Choice
In the spot market, $1 is currently equal to .5725. The expected inflation rate in the U.K. is 4 % and in Canada 2 %. What is the expected exchange rate one year from now if relative purchasing power parity exists?
A) .56105
B) .57216
C) .58395
D) .59001
E) .59540
Correct Answer:
Verified
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