Multiple Choice
At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the forecast inflation rates for 2002 were 4.00% for Australia and 2.50% for the US.
What is the AUD/USD exchange rate forecast to be at the end of 2002, according to PPP theory?
A) USD/AUD 1.9872
B) AUD/USD 1.9872
C) AUD/USD 1.9303
D) none of the given answers
Correct Answer:
Verified
Correct Answer:
Verified
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