The Exchange Rate at the Beginning of a Year Between

question 5

Multiple Choice

The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S.dollar is R43.125/$.The annual inflation rates in India and in the United States are 19 percent and 3 percent respectively.What would be the new exchange rate at the end of the year?

• A) R49.8224/$
• B) R37.327/$
• C) R0.0267/$
• D) $37.327/R

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