Question: please answer all a and b a. Determine the expected future spot rate in one year E(S1) in USD/GBP, given the information above. b. Determine

please answer all a and b

a. Determine the expected future spot rate in one year E(S1) in USD/GBP, given the information above.

b. Determine the implied inflation rate in the UK, given US inflation is 6.0%, using the information above.

Currently, the spot exchange rate is $1.50/E and the one-year forward exchange rate is $1.52/E. The one-year interest rate is 8.0% per annum in the U.S. and 3) per annum in the U.K. Assume that you can borrow as much as $1,500,000 or Eto00.000

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