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boland boland
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Posts: 1892
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8 years ago
The implied PPP rate of exchange of Mexican pesos per U.S. dollar is 8.58 according to the Big Mac Index.  The current exchange rate is Peso 10.8/$1.  Thus, according to PPP and the Law of One Price, at the current exchange rate the peso is
A) overvalued.
B) correctly valued.
C) undervalued.
D) There is not enough information to answer this question.
Textbook 
Fundamentals of Multinational Finance

Fundamentals of Multinational Finance


Edition: 5th
Authors:
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noxx53noxx53
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#1
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Posts: 1891
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8 years ago
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boland Author
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#2
8 years ago
Woah how do you have the time to do all this?!

Thanks Smiling Face with Open Mouth
wrote...
#3
8 years ago
You're welcome Wink Face
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