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You observe the following current rates and prices today: the spot exchange rate today: E ( $ / pound ) = 1 . 2 0

You observe the following current rates and prices today:
the spot exchange rate today: E($/pound)=1.20, AU$1.20 per U.K pound,
the expected one-year ahead inflation rate in Australia: \pi ($)=4%.
the expected one-year ahead inflation rate in the U.K.: \pi (pound)=6%.
the price level in Australia today: P($)= AU$10.00
the price level in the U.K. today: P(pound)=8.00 pounds What is the real exchange rate, q(AU/UK), today? (rounded up to 2 decimal places).

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