The interest rate on South Korean government securities with one-year maturity is 4 percent, and the expected

Question:

The interest rate on South Korean government securities with one-year is 4 percent, and the expected inflation rate for the coming year is 2 percent. The interest rate on U.S. government securities with one-year is 7 percent, and the expected rate of inflation is 5 percent. The current spot for Korean won is $1 = W1,200. Forecast the spot one year from today. Explain the logic of your answer.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...