Omni Advisors, an international pension fund manager, uses the concepts of purchasing power parity $($PPP$)$ and the Interna Fisher Effect $($IFE$)$ to forecast spot exchange rates. Omni gathers the financial information as follows:

Base price level

Current U$.$S$.$ price level

Current South African price level

Base rand spot exchange rate

Current rand spot exchange rate

Expected annual U$.$S$.$ inflation

Expected annual South African inflation $7\%$

Expected U$.$S$.$ one$-$year interest rate $5\%$

$\backslash$table$[[$Expected South African one$-$year interest rate,$10\%$