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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
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 the Australian dollar is quoted at $0.70. You believe that purchasing power parity holds. The spot rate in a year will be: O a. $0.73 O b. $1.73 O c. $0.79 O d. $0.88
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