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Suppose the expected rate of inflation in year 1 and year 2 is 3% p.a. and 4% p.a. respectively in Australia. What must the constant

Suppose the expected rate of inflation in year 1 and year 2 is 3% p.a. and 4% p.a. respectively in Australia. What must the constant annual expected rate of inflation be in the US such that the exchange rate today is the same at the end of year 2?

7.1225%

5.4925%

7.000%

3.4988%

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