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The current spot rate between Australia and the United States is 1.15 AUD/USD Australia 8% 5% United States 3% 2% Nominal I-year interest rate Expected

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The current spot rate between Australia and the United States is 1.15 AUD/USD Australia 8% 5% United States 3% 2% Nominal I-year interest rate Expected annual inflation If the Purchasing Power Parity holds, the expected spot rate in 9 months is closest to: A) 1.1753 AUD/USD B) 1.1755 AUD/USD C) 1.1838 AUD/USD. D) 1.1916 AUD/USD. E) 1.1922 AUD/USD

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