Question: 1) Explain its assumptions and discuss the Purchasing Power Parity Theorem. How can we forecast the future FX rates according to the model? Is the

1) Explain its assumptions and discuss the Purchasing Power Parity Theorem.

1) Explain its assumptions and discuss the Purchasing Power Parity Theorem. How can we forecast the future FX rates according to the model? Is the model reliable in forecasting the FX rates? What are the criticisms of the Purchasing Power Parity Theorem

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