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Assume that inflation in the United States is expected to be 9 percent, while inflation in Australia is expected to be 5 percent over the

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Assume that inflation in the United States is expected to be 9 percent, while inflation in Australia is expected to be 5 percent over the next year. Today you receive an offer to purchase a one-year put option for 5.03 per unit on Australian dollars at a strike price of $0.72. Today the Australian dollar is quoted at $0.70. You believe that purchasing power parity holds. You should accept the offer. a. True b. False

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