19. IN THE SPOT MARKET, SF 2 / 1 US$. ASSUME THAT THE U.S. WILL HAV...

21-19. In the spot market, SF 2 / 1 US$. Assume that the U.S. will have an inflation rate of 20 percent and Switzerland will have an inflation rate of 10 percent for the coming year. Calculate the new exchange rate according to the purchasing power parity doctrine. (a) SF 2.00 / $ (b) SF 2.20 / $ (c) SF 1.75 / $ * (d) SF 1.83 / $ (e) none of the above