Question
The inflation rate in the U.K. is 4%, while the inflation rate in the U.S. is 8%. The spot rate for the British pound is
The inflation rate in the U.K. is 4%, while the inflation rate in the U.S. is 8%. The spot rate for the British pound is $1.50. According to the Purchasing Power Parity (PPP), what level will the British Pound will be adjusted to?
The British Pound will change to ?
Please do not round during intermediate steps and round your final answer to four decimal places.
please show work
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Fundamentals Of Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
2nd Edition
0324406363, 978-0324406368
