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Question 10: You expect the following inflation rates: Australia: 5.0%; United States: 10.0%. Based on Relative Purchasing Power Parity (RPPP) by how many percent will
Question 10: You expect the following inflation rates: Australia: 5.0%; United States: 10.0%. Based on Relative Purchasing Power Parity (RPPP) by how many percent will the AUD will appreciate/depreciate against the USD? Question 14: The one-year interest rates for the USD and the AUD are: rUSD = 6% and rAUD = 4%. Assume that XUSD/AUD = 0.73 and that the spot rate is consistent with the Uncovered Interest Rate Parity (UIRP) Condition. According to VIRP, what is the expected spot rate at t = 1
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