38) T the U.S is 2.8 he current spot rate between the p 7 percent and the ex 1.7592/S. The expected inflation rate in ound and dollar is expecte percent. Assuming pected inflation rate in the U.K. is 1.94 ve purchasing power parity holds, what will the exchange rate be next y A) .7957 /S B).7663 /S C) .7521/S D) .7822 /S E) .7822 /$ 39) Absolute purchasin g power parity is most likely to exist for which one of the following items? A) B) C) D) E) A BMW convertible A MacBook An ounce of gold A foldable cell phone A bottle of perfume 40) Which one of the following is the risk that a firm faces when it opens a facility in a foreign country, given that the exchange rate between the firm's home country and this foreign country fluctuates over time? Exchange rate risk Purchasing power risk Political risk International risk Diversifiable risk A) B) C) D) E)