If the inflation rate in the United States is expected to average 4% in the future and the inflation rate in Denmark is expected to average 7%,what spot rate is expected to be in effect in three years? Assume the Danish kroner per U.S.dollar exchange rate is now $0.20.
A) $0.245
B) $0.219
C) $0.177
D) $0.192
E) $0.206
Correct Answer:
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