Absolute form of purchasing power parity

Definition:

A theory that prices of products of two different countries should be equal when measured by a common currency. Also called the "law of one price."

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Gross profit margin

Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold.

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