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    Relative PPP

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    For the coming year, inflation in Brazil is expected to be 15% while the US inflation is expected to be 3%. Spot Brazil Real is 2.86BRL/USD. Based on relative PPP, what would you expect BRL/USD to do and by how much in one year?

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    https://brainmass.com/economics/inflation/relative-ppp-brl-usd-28562

    Solution Preview

    If $1 is invested, one year later, it is worth 1/(1+i) = ...

    Solution Summary

    Based on relative PPP, what would you expect BRL/USD to do and by how much in one year?

    $2.49

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