8. Purchasing power parity (S28.2) In September 2021, the exchange rate for the Narnian leo was USD/LEO

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8. Purchasing power parity (S28.2) In September 2021, the exchange rate for the Narnian leo was USD/LEO = 2,419. Inflation in the year to September 2022 was about 30% in Narnia and 2% in the United States.

a. If purchasing power parity held, what should have been the nominal exchange rate in September 2022?

b. The actual exchange rate in September 2022 in the midst of a currency crisis was USD/

LEO = 8,325. What was the change in the real exchange rate?

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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Question Posted: Jul 31, 2024 09:01 AM

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8. Purchasing power parity (S28.2) In September 2021, the exchange rate for the Narnian leo was USD/LEO

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Principles Of Corporate Finance

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