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Tutorial solutions 6CHAPTER 6:INTERNATIONAL PARITY RELATIONSHIPS ANDFORECASTING FOREIGN EXCHANGE RATESQUESTIONS5.Discuss the implications of the deviations from the purchasing power parity for countries’competitive positions in the world market.
7.Researchers found that it is very difficult to forecast the future exchange rates moreaccurately than the forward exchange rate or the current spot exchange rate. How would youinterpret this finding?
10. Explain the following three concepts of purchasing power parity (PPP):a. The law of one price.b.Absolute PPP.c. Relative PPP.Answer:

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Chapter 8 / Exercise 30
International Financial Management
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International Financial Management
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Chapter 8 / Exercise 30
International Financial Management
Madura
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