Dalin Chen owns homes in Sydney, Australia, and Denver, United States. She travels between the twocities at least twice a year. Because of her frequent trips, she wants to buy some new high-qualityluggage. She has done her research and has decided to purchase a Briggs and Riley three-pieceluggage set. There are retail stores in Denver and Sydney. Dalin was a finance major and wants to usepurchasing power parity to determine if she is paying the same price regardless of where she makesher purchase1. If the price of the three-piece luggage set in Denver is USD850 and the price of the samethree-piece set in Sydney is A UD930, using purchasing power parity, is the price of theluggage truly equal if the spot rate is USD/A UD = 1,0941?2. If the price of the luggage remains the same in Denver one year from now, determine theprice of the luggage in Sydney in one years time if PPP holds true. The US inflation rate is1,15% and the Australian inflation rate is 3,13%