What is the expected value for spot exchange rate one year, Finance Basics

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What is the expected value for spot exchange rate one year

Problem

The current Swiss franc/U.S. dollar spot exchange rate is 2.75 Swiss francs per dollar, or SF/$ = 2.75. The expected average inflation over the next year is 5% in Switzerland and 3% in the United States. What is the expected value for the spot exchange rate one year from now, according to purchasing power parity?

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Finance Basics: What is the expected value for spot exchange rate one year

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