Purchasing Power Parity Formula (basic question) exchange, question, difficult, different

BC_MBA_student

I have a quick question about PPP. I know it's not the most difficult concept, but I seem to be getting different formulas, and I'm starting to get confused.

I'm looking at CFA Sample Exam 1 from 2009

#14 ask us to compute the 1 year forward exchange rate using PPP. Spot C$/$ is 1.2138. US inflation = 1.9% and Canada inflation = 2.3%. According to PPP, the forward C$/$ rate is _________?

In the answer they write: PPP = F/S = [1+foreign rate/1+domestic rate] = 1.2091

Then, on question 18 "based on the data in Exhibit 1, the expectation for the Brazilian Real is consistent with which of the following parity relations?"

For PPP, they use the formula: F/S = [1+DOMESTIC rate/1+FOREIGN rate]

HERE'S MY QUESTION, WHEN DO WE USE:

F/S = [1+DOMESTIC rate/1+FOREIGN rate]

AND

F/S = [1+foreign rate/1+domestic rate]



Thanks in advance for any responses