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Suppose inflation rates in the U.S. and Australia are expected to be 4% and 9%, respectively, next year and 6% and 7%, respectively, in the
Suppose inflation rates in the U.S. and Australia are expected to be 4% and 9%, respectively, next year and 6% and 7%, respectively, in the following year. If the current spot rate is $0.75, then the expected spot value of the A$ in two years is
a.
$.7100
b.
$.1024
c.
$.1111
d.
$.0992
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