Chapter 17 Foreign Exchange Risk

Assume that sterling and the US dollar are at PPP equilibrium, at the current spot rate of $1.50/£, i.e. the sterling price x current spot rate of $1.50 = dollar price. The spot rate is the rate at which currency can be exchanged today. The US market. The UK market. Cost of item now. $3,000. $1.50. £2,000 Estimated inflation. 5%. 3%. Cost in ... ................
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