The absolute purchasing power parity theory posits

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1. (TRUE or FALSE) The absolute purchasing power parity theory posits that exchange rates are determined by the differences in the prices of a given market basket of traded goods and services when there are no trade barriers.

2. (TRUE or FALSE) In general, the diversification benefits are greater for a portfolio that contains both domestic and foreign securities, rather than domestic securities alone.

3. (TRUE or FALSE) When a country’s currency weakens relative to the currencies of other countries, imported goods become more expensive for citizens of the country with the weakened currency.

Reference no: EM131948084

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