Question $40$

$1$ pts

The following options are all important reasons to study the theory of PPP EXCEPT:

the deviations from the theory are very small when it comes to the determination of exchange rates

it is particularly useful in assessing cost$-$of$-$living differences across countries

deviations from PPP significantly affect the profitability of firms.

it provides a baseline forecast of future exchange rates that is usually considered whenever it is necessary to forecast future cash flows in different currencies.