In the Spot Market,$1 Is Currently Equal to £0

question 45

Multiple Choice

In the spot market,$1 is currently equal to £0.6211.Assume the expected inflation rate in the U.K.is 4.2 percent while it is 3.1 percent in the U.S.What is the expected exchange rate one year from now if relative purchasing power parity exists?

• A)£0.6161
• B)£0.6178
• C)£0.6239
• D)£0.6279
• E)£0.6291

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Definitions:

Physical Size

The dimensions or magnitude of an object or person's body, typically measured in terms of height, weight, or volume.

Urban Environment

An area characterized by high human population density and vast human-built features in comparison to the areas surrounding it.

Self-perception

An individual's awareness and understanding of their personality, behaviors, and characteristics as perceived by themselves.

Sedentary Activity

Activities that involve little to no physical movement, resulting in minimal energy expenditure.