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Question 1 0 If the forecast UK inflation rate is 6 % and the forecast European inflation rate is 9 % and the spot exchange

Question 10
If the forecast UK inflation rate is 6% and the forecast European inflation rate is 9% and
the spot exchange rate is 1.501. Then according to relative PPP which of the following
statements is correct?
A) The pound is forecast to appreciate by 3% to approximately 1.5451
B) The pound is forecast to depreciate by 3% to approximately 1.45501
C) The euro is forecast to appreciate by 3% to approximately 1.5451
D) The euro is forecast to depreciate by 3% to approximately 1.45501
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