What is the real currency value change of the aud

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Reference no: EM131567980

Suppose the inflation rate in the U.S and Australia are expected to be 3% and 5.5%. If the spot rate is AUD 1.331/USD and exchange rtae one year late changes to AUD 1.315/USD, what is the real currency value change of the AUD.

A. Appreciation by 3.67%

B. Appreciation by 1.22%

C. Depreciation by 3.67%

D. Depreciation by 1.22%

E. None of the above

Reference no: EM131567980

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