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Suppose that spot exchange rate (USD/EUR) is 1.2500, expected US inflation rate for the coming year is 4% and expected French inflation rate for coming
Suppose that spot exchange rate (USD/EUR) is 1.2500, expected US inflation rate for the coming year is 4% and expected French inflation rate for coming year is 2%.What is the expected spot rate one year from now if purchasing power parity holds?
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