Question $12$

Suppose the annual inflation rate in the US is expected to be $2\mathrm{.}5\%,$ while it is expected to be

$18\mathrm{.}00\%$ in Mexico. The current spot rate $($on $1/1/$X$0)$ for the Mexican Peso $($MXN$)$ is $$0\mathrm{.}1000.$

According to Purchasing Power Parity, one year later, the expected spot price for MXN on

$\frac{1}{1}\frac{?}{x1}$ should be:

$$0\mathrm{.}1151$

$$0\mathrm{.}0869$

$$0\mathrm{.}1012$

$$0\mathrm{.}0983$