Currently, You Can Exchange €100 for $124

question 16

Multiple Choice

Currently, you can exchange €100 for $124.15.The inflation rate in Europe is expected to be 3.3 percent as compared to 3.1 percent in the U.S.Assuming that relative purchasing power parity exists, what should the exchange rate be five years from now?

• A)€.8098/$1
• B)€.8136/$1
• C)€.8071/$1
• D)€.8039/$1
• E)€.7975/$1

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Definitions:

Snowfall

Precipitation in the form of flakes of crystalline water ice, falling from clouds.

Z

A statistical value representing the number of standard deviations a data point is from the mean in a standard normal distribution.

Percentage

A proportion or share expressed as a fraction of 100, denoting part of a whole.

Normal Model

A bell-shaped probability distribution characterized by its mean and standard deviation, often used to describe naturally occurring phenomena.