A burger costs $5 in the US, while the same burger costs 90 baht in Thailand. However, the current actual exchange rate is 36 baht/$. We can say that Thai baht is 50% overvalued. Thai baht is 100% overvalued. Thai baht is 50% undervalued. Thai baht is 100% undervalued.
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- While shopping in the Mexican market, you find that limes cost 11 pesos each. You remember that back in the U.S., they cost 80 cents each. If the purchasing power parity theory holds, the rate of exchange is A. 13.75 pesos/dollar or 7.3 cents/peso. B. 80 pesos/dollar or 1.25 cents/peso. C. 7.3 pesos/dollar or 13.75 cents/peso. D. 11 pesos/dollar or 0.80 cents/peso.In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 141 yen per dollar, what would the car be selling for today in U.S. dollars?Abigail lives in the UK and earns 40,000 pounds sterling per year. Her friend Barry lives in Japan and earns 8 million Japanese yen per year. The cost of a standardised consumption basket is 400 pounds sterling in the UK and 100,000 yen in Japan. The nominal exchange rate is Xy/s = 200, that is, one pound sterling can be exchanged for 200 Japanese yen Is the pound sterling overvalued or undervalued compared to the Japanese yen? Explain you calculations..
- In the spot market, 7.8 pesos can be exchanged for 1 U.S. dollar. A pairof headphones costs $15 in the United States. If purchasing power parityholds, what should be the price of the same headphones in Mexico?A computer costs $600 in the United States. The same model costs €555 in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Do not round intermediate calculations. Round your answer to two decimal places. 1 euro = $A computer costs $ 1,300 in the United States. The same computer cost £1100 in Europe. Assuming that the purchasing power parity (PPP) strictly holds, what is the spot exchange rate between the dollar and the euro?
- Apple is selling 30,000 units in Europe at an average price of €1,500 per unit. Both the spot and forward exchange rates are $1.20/€. The cost of each unit in dollars is $1,300 per unit. The elasticity of demand for Apple computers in Europe is €= 1.5. Now consider a depreciation of Euro (relative to US dollar) from $1.20/€ to $1.08/€ and assume zero passthrough. What is Apple's exposure? a. $45 million b. $20 million c. €45 million d. €20 millionYou are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.4 million Czech koruna today in exchange for a year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.9 million Thai baht today. If the current competitive market exchange rates are 25.26 koruna per dollar and 41.33 baht per dollar, what is the value of this exchange to you? The cost of the shrimp from the Thai supplier in dollars is =? You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.4 million Czech koruna today in exchange for a year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.9 million Thai baht today. If the current competitive market exchange rates are 25.04 koruna per dollar and 40.64 baht per dollar, what is the value of this exchange to you? The cost of the shrimp from the Thai supplier in dollars is $ (Round to the nearest cent.)