1. The CEO requires a forecast of the one year and two year exchange rates for the $/f calculated based on purchasing power parity (PPP) and with the International Fisher Effect (IFE) with the following existing available information: Current $/E spot exchange rate $1.3036/E Expected annual U.S. inflation 0.37% Expected annual British inflation 0.20% Expected U.S. one-year interest rate 0.140% Expected British one-year interest rate 0.077%