Assume 1 is currently equal to a11024 in the spot market, Financial Management

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Assume 1 is currently equal to a11024 in the spot market

Assume $1 is currently equal to A$1.1024 in the spot market. Also assume the expected inflation rate in Australia is 2.8 percent as compared to 3.4 percent in the U.S. What is the expected exchange rate one year from now if relative purchasing power parity exists?

A$1.0958

A$1.1005

A$1.875

A$1.985

A$1.0810

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Financial Management: Assume 1 is currently equal to a11024 in the spot market

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Financial Management: Assume 1 is currently equal to a11024 in the spot market

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