Question 21.S-TP.1: Relative Purchasing Power Parity The inflation rate in the U...

Fundamentals of Corporate Finance Standard Edition

Relative Purchasing Power Parity The inflation rate in the United States is projected at 3 percent per year for the next several years. The New Zealand inflation rate is projected to be 5 percent during that time. The exchange rate is currently NZ$ 1.66. Based on relative PPP, what is the expected exchange rate in two years?

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Question: 21.S-TP.2

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