Which One of the Following Formulas Correctly Describes the Relative

Multiple Choice

Which one of the following formulas correctly describes the relative purchasing power parity relationship?

A) E(S_t) = S₀ * [1 + (h_FC - h_CDN) ]^t
B) E(S_t) = S₀ * [1 - (h_FC - h_CDN) ]^t
C) E(S_t) = S₀ * [1 + (h_CDN + h_FC) ]^t
D) E(S_t) = S₀ *[1 - (h_CDN - h_FC) ]^t
E) E(S_t) = S₀ * [1 + (h_CDN - h_FC) ]^t