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Purchasing Power Parity Formula

This topic has 3 replies, 2 voices, and was last updated 10 years ago by MikeLittle.

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June 2, 2015 at 7:27 pm #252133
seanog91
Member
- Topics: 83
- Replies: 54
Hi,
Is the formula Forward Rate = Current Spot Rate[1+inflation in the home country / 1+ inflation in the second country)]
In the BPP kit it is the other way around but i always thought it was the above,
Thanks
June 2, 2015 at 7:58 pm #252145
MikeLittle
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Which page have you posted this on?
June 2, 2015 at 8:08 pm #252151
seanog91
Member
- Topics: 83
- Replies: 54
Sorry Mike, its supposed to be F9.
I will repost thanks!
June 2, 2015 at 8:11 pm #252156
MikeLittle
Keymaster
- Topics: 27
- Replies: 23368
Thank heavens for that! I couldn’t have answered it otherwise 🙂
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