The current spot rate between the U.K. and the U.S. is £0.5331 per $1. The expected inflation rate in the U.S. is 4.5%. The expected inflation rate in the U.K. is 3.6%. If relative purchasing power parity exists, the exchange rate next year will be: (please explain the calculation.)
a. £1.8927/$1
b. £0.5379/$1
c. £1.8589/$1
d. £0.5192/$1
e. £0.5283/$1