revision mock question ;_;

This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.

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May 24, 2015 at 12:33 pm #248399
fahad
Member
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hello, the current exchange rate for us $ against the pound is us/pound 1.84
inflation in us is 5 % p.a whereas in uk it is 4%
exchange rate in 2 years ?

1.84x 1.05/1.04 = 1.86 right ?
May 24, 2015 at 5:21 pm #248482
John Moffat
Keymaster
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No!

1.86 is the forecast exchange rate in 1 years time.

For a forecast in 2 years time you multiply by another 1.05/1.04

(I go through exactly the same example in the free lecture!!)
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