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The Australian Consumer Price Index (CPI) is currently 284.4 and the Swiss CPI is currently 291.6. Economists expect that in one year the Australian CPI
The Australian Consumer Price Index (CPI) is currently 284.4 and the Swiss CPI is currently 291.6. Economists expect that in one year the Australian CPI will be 308.5 and the Swiss CPI will be 308.1. The current spot exchange rate between the two countries is CHF1.0447/AUD. If relative purchasing power parity holds, what is the expected spot exchange rate in one year? a. CHF1.0698/AUD b. CHF1.0725/AUD c. CHF1.0176/AUD d. CHF1.0461/AUD e. CHF1.0189/AUD
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