Which one of the following formulas correctly describes the relative purchasing power parity relationship?
A) E(St) = S₀[1 + (hFC − hUS) ]ᵗ
B) E(St) = S₀[1 - (hFC − hUS) ]ᵗ
C) E(St) = S₀[1 + (hUS + hFC) ]ᵗ
D) E(St) = S₀[1 − (hUS − hFC) ]ᵗ
E) E(St) = S₀[1 + (hUS - hFC) ]ᵗ
Correct Answer:
Verified
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