Question
Assume the current spot rate between the UK and the U.S. is 0.758 per $1, the expected inflation rate in the U.S. is 2.85 percent,
Assume the current spot rate between the UK and the U.S. is 0.758 per $1, the expected inflation rate in the U.S. is 2.85 percent, and the expected inflation rate in the UK is 3.79 percent. If relative purchasing power parity exists, what will the exchange rate be 5 years from now?
Enter your answer rounded off to FOUR decimal points. Do not enter any currency symbol in th answer box.
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
