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you are currently evaluating the possibility of expanding in Europe. Currently, you can exchange 100...

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Finance

you are currently evaluating the possibility of expanding in Europe. Currently, you can exchange 100 for $134.15. The inflation rate in Euroland is expected to be 3.1 percent as compared to 3.6 percent in the U.S. Assuming that relative purchasing power parity exists, what should the exchange rate be five years from now?

a. 0.7367/$1 b. 0.7270/$1 c. 0.7405/$1 d. 0.7423/$1 e. 0.7198/$1

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