The following regression analysis was conducted for the inflation rate information and exchange rate of the British pound: 
Regression results indicate that a0 = 0 and a1 = 1. Therefore:
A) purchasing power parity holds.
B) purchasing power parity overestimated the exchange rate change during the period under examination.
C) purchasing power parity underestimated the exchange rate change during the period under examination.
D) purchasing power parity will overestimate the exchange rate change of the British pound in the future.
Correct Answer:
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