Statement: You are an Australian investor, and are considering purchasing Hong-Kong (HKD) denominated bonds. All else equal, an increase in the Australian inflation rate will lead to an increase in the real exchange rate (AUD/HKD). A higher real exchange rate means that the relative purchasing power of your AUD-denominated income is higher. This statement is: Correct Incorrect, with respect to the real exchange rate only. incorrect, with respect to both the real exchange rate and purchasing power of the AUD-denominated income