Calculate the expected exchange rate in one year's time if the present exchange rate is AUD 1 = JPY 80 and if the expected inflation rates in Australia and Japan are 2 per cent and 8 per cent,respectively.
A) AUD 1 = JPY 82.50
B) JPY 1 = AUD 0.0132
C) AUD 1 = JPY 78.20
D) JPY 1 = AUD 0.0118
Correct Answer:
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