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You are asked to forecast the AUD/ Pound spot rate for the next year. Currently the inflation index in Australia stands at 123, and
You are asked to forecast the AUD/ Pound spot rate for the next year. Currently the inflation index in Australia stands at 123, and is forecast to rise to 127.92 over the next year. The UK inflation index is forecast to be 284.49 at the end of the year and currently stands at 261. If the spot rate currently stands at 1 AUD = 0.3100 GBP, what is the forecast exchange rate 1 AUD = ??? GBP if you believe in Purchasing Power Parity Theory?
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According to the Purchasing Power Parity PPP theory exchange rates should adjust in the long run to ...
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
