The Ratio of Expected Spot Rate to Current Spot Rate

question 110

Multiple Choice

The ratio of expected spot rate to current spot rate for $/£ is 1.02 and the inflation rate in the U.S.is 5%.What is the approximate inflation rate in the United Kingdom?

• A)1.3%
• B)2.9%
• C)4.1%
• D)7.0%

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Definitions:

Nonpolar

A type of chemical bond or molecule that does not have a separation of electrical charge, leading to an even distribution of electron density.

Cl-Cl Bond

A covalent bond between two chlorine atoms, as found in the diatomic chlorine molecule (Cl2).

Polar Covalent

A type of chemical bond where electrons are unequally shared between atoms, leading to a distribution of charge.

N-Br Bond

A chemical bond between nitrogen and bromine atoms.