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Assume the inflation rate in the U.S. is 1.59 percent. The spot rate for a foreign...

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Finance

Assume the inflation rate in the U.S. is 1.59 percent. The spotrate for a foreign currency is 1.412 while the 1-year forward rateis 1.419. What is the approximate rate of inflation in the foreigncountry?

2.46%

2.35%

2.28%

2.17%

2.09%

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Transcribed Image Text

Assume the inflation rate in the U.S. is 1.59 percent. The spotrate for a foreign currency is 1.412 while the 1-year forward rateis 1.419. What is the approximate rate of inflation in the foreigncountry?2.46%2.35%2.28%2.17%2.09%

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