The spot exchange rate of British Pound (£) is $2.56(Canadian) /£.The annual inflation rate in Canadian $is 4% and 8% in Britain.What will be the anticipated exchange rate at the end of the year if PPP is valid?
A) $2.4652/£
B) $2.1503/£
C) $3.0804/£
D) $2.5600/£
Correct Answer:
Verified
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