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The expected annual inflation rates in the US and UK for the next 3 years are 3 percent and 2 percent respectively. The current spot
The expected annual inflation rates in the US and UK for the next 3 years are 3 percent and 2 percent respectively. The current spot rate for pound is $1.22. Using the relative Purchasing Power Parity, forecast the expected future spot rates at the end of 1 year, 2 years and 3 years (show your work )
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