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According to purchasing power parity theory, in the long run what would happen to the exchange rate if the price of a computer in the United States = $1,000, the price of a computer in Japan = 200,000 yen, and the current exchange rate was $1.00 = 100 Yen?
Dividends
payments made by a corporation to its shareholder members, usually derived from the company's profits.
Bondholders
Individuals or institutions that hold the debt securities issued by corporations or governments, entitling them to receive interest and the return of principal.
Present Value
The value today of a future monetary sum or sequence of cash inflows, calculated with a defined return rate.
Interest Rate
The rate of a loan designated as interest to the borrower, typically represented as an annual percentage of the loan's unpaid balance.
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