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Assume a Canned Soft Drink Costs $1 in the U

Question 40

Multiple Choice

Assume a canned soft drink costs $1 in the U.S.and $1.30 in Canada.At the same time, the currency per U.S.dollar is C$1.30.Which one of the following conditions exists in this situation?


A) Absolute purchasing power parity
B) Interest rate parity
C) Relative purchasing power parity
D) Translation exposure
E) Equal spot and forward rates

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