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How do I approach this question? The future inflation rates for Australia and Portugal for the next two years are expected to average 8 percent
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The future inflation rates for Australia and Portugal for the next two years are expected to average 8 percent per year in Australia, and 6 percent per year in Portugal. If inflation in Australia over the next two years turns out to average 9% per year, and Portuguese inflation averages 5% per year, what is the real value of the euro in two years? Assume that the exchange rate in two years is AUD1.90/EUR. Select one: a. AUD1.76/EUR b. AUD2.05/EUR C. AUD1.83/EUR d. AUD1.83/EUR e. AUD1.86/EURStep by Step Solution
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