International Financial Management Class

Assume that the U.S. one-year interest rate is \3 and the one-year interest rate on Australian dollars is \6. The U.S. expected annual inflation is \5, while the Australian inflation is expected to be \8. You have \\( \\$ 100,000 \\) to invest for six months and you believe that PPP holds. The spot exchange rate of an Australian dollar is \\( \\$ 0.789 \\). What is the FV in USD if you invest in the Australian market and bring the money back to US? a. 103231 b. 152933.46 c. 164234 d. 101989