The Current Spot Rate Between the UK and the US

question 2

Multiple Choice

The current spot rate between the UK and the US is £0.5418 per US$1.The expected inflation rate in the US is 2.5 per cent.The expected inflation rate in the UK is 4.0 per cent.If relative purchasing power parity exists,the exchange rate 3 years from now will be:

• A)£0.5927/$1
• B)£0.5623/$1
• C)£0.5665/$1
• D)£0.5995/$1
• E)£0.5601/$1

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Definitions:

Topical Moisturizing Agents

Products applied directly to the skin to provide hydration and improve skin barrier function.

Bath Water

The water used for bathing, which can be tailored in temperature and additives for hygiene or therapeutic purposes.

Circumcised

Referring to the surgical removal of the foreskin from the human penis, a procedure often performed for religious, cultural, or medical reasons.

Foreskin

The retractable fold of skin covering the end of the penis.