If PPP Holds Then

If PPP holds then:

A) real currency depreciation or appreciation will not occur as changes in commodity prices will be offset by changes in the nominal exchange rate so hedging will not be necessary
B) the spot exchange rate will not change so hedging will not be necessary
C) the forward rate will equal the spot rate at maturity of the forward contract so hedging will not be necessary
D) the foreign currency return will equal the domestic currency return and any change in the spot rate . will be offset by change in the interest rate differential so hedging will not be necessary