Question: Suppose that E[p$] = 2% annually, E[pPeso] = 8.12% annually, and S0Peso/$ = Peso20.0000/$. Then, the expected spot exchange rate one year from now should

Suppose that E[p$] = 2% annually, E[pPeso] = 8.12% annually, and S0Peso/$ = Peso20.0000/$. Then, the expected spot exchange rate one year from now should be ___________ based on the relative purchasing power parity (RPPP).

Peso18.8679/$

Peso21.6240/$

Peso20.4000/$

Peso21.2157/$

Peso21.2000/$

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