Question: The current spot rate between the pound and dollar is .7556/$. The expected inflation rate in the U.S is 2.39 percent and the expected inflation

The current spot rate between the pound and dollar is .7556/$. The expected inflation rate in the U.S is 2.39 percent and the expected inflation rate in the U.K. is 2.93 percent. Assuming relative purchasing power parity holds, what will the exchange rate be next year?

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