Assume an exchange rate of R6.8344/$. Also assume the cost of living is the same in the United States and South Africa, and that the inflation rate is 8.5% in South Africa and 3.5% in the United States. Calculate the expected exchange rate at the end of one year.

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The Answer of Assume an exchange rate of R6.8344/$. Also assume the cost of living is the same in the United States and South Africa, and that the inflation rate is 8.5% in South Africa and 3.5% in the United States. Calculate the expected exchange rate at the end of one year.

Assume an Exchange Rate of R6