Question
Assume the current spot rate between the UK and the U.S. is 0.736 per $1, the expected inflation rate in the U.S. is 2.77 percent,
Assume the current spot rate between the UK and the U.S. is 0.736 per $1, the expected inflation rate in the U.S. is 2.77 percent, and the expected inflation rate in the UK is 3.86 percent.
If relative purchasing power parity exists, what will the exchange rate be 3 years from now? (answer rounded off to 4 decimal places)
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
978-0071051507
