Which One of the Following Formulas Correctly Describes the Relative

question 53

Multiple Choice

Which one of the following formulas correctly describes the relative purchasing power parity relationship?

• A)E(S_t) = S₀ × [1 + (h_FC - h_US)]^t
• B)E(S_t) = S₀ × [1 - (h_FC - h_US)]^t
• C)E(S_t) = S₀ × [1 + (h_US + h_FC)]^t
• D)E(S_t) = S₀ × [1 - (h_US - h_FC)]^t
• E)E(S_t) = S₀ × [1 + (h_US - h_FC)]^t