Problem 1 Comparison of prices or costs across different country and currency environments requires the translation of the local currency into a single common currency. This is most meaningful when the comparison is for the identical or near-identical product or service across countries. Deutsche Bank has recently started publishing a comparison of cheap dates - and evening on the town for two to eat at McDonald's, see a movie, and drink a beer. Once all costs are converted to a common currency, the U.S. dollar in this case, the cost of the date can be compared across cities relative to the base case of a cheap date in USD in New York City. After completing the table available in images. answer the following questions: (ALL Tables are also available in the images). a. Which city in the table is truly the cheapest date? b. Which city in the table is the most expensive-cheap date? c. If the exchange rate in Moscow on the Russian ruble (RUB) was 0.04200, instead of 0.0283, what would be the USD price? d. If the exchange rate in Shanghai was CNY 6.66 = 1 USD, what would be its cost in USD and relative to a cheap date in New York City?
Problem 1 Comparison of prices or costs across different country and currency environments requires the translation of the local currency into a single common currency. This is most meaningful when the comparison is for the identical or near-identical product or service across countries. Deutsche Bank has recently started publishing a comparison of cheap dates - and evening on the town for two to eat at McDonald's, see a movie, and drink a beer. Once all costs are converted to a common currency, the U.S. dollar in this case, the cost of the date can be compared across cities relative to the base case of a cheap date in USD in New York City. After completing the table available in images. answer the following questions: (ALL Tables are also available in the images). a. Which city in the table is truly the cheapest date? b. Which city in the table is the most expensive-cheap date? c. If the exchange rate in Moscow on the Russian ruble (RUB) was 0.04200, instead of 0.0283, what would be the USD price? d. If the exchange rate in Shanghai was CNY 6.66 = 1 USD, what would be its cost in USD and relative to a cheap date in New York City?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Problem 1
Comparison of prices or costs across different country and currency environments requires the
translation of the local currency into a single common currency. This is most meaningful when the
comparison is for the identical or near-identical product or service across countries. Deutsche Bank
has recently started publishing a comparison of cheap dates - and evening on the town for two to
eat at McDonald's, see a movie, and drink a beer. Once all costs are converted to a common
currency, the U.S. dollar in this case, the cost of the date can be compared across cities relative to
the base case of a cheap date in USD in New York City.
After completing the table available in images.
answer the following questions:
(ALL Tables are also available in the images).
a. Which city in the table is truly the cheapest date?
b. Which city in the table is the most expensive-cheap date?
c. If the exchange rate in Moscow on the Russian ruble (RUB) was 0.04200, instead of 0.0283, what
would be the USD price?
d. If the exchange rate in Shanghai was CNY 6.66 = 1 USD, what would be its cost in USD and relative
to a cheap date in New York City?
Transcribed Image Text:nar 1 Problems.pdf (185 KB) | A Alternative formats
Table 1
Country
Australia
Brazil
Canada
China
France
Germany
Hong Kong
India
Indonesia
Japan
Malaysia
Mexico
New
Zealand
Phillipines
Russia
Singapore
South Africa
United
Kingdom
United
States
United
States
City
Sydney
Rio de
Janeiro
Ottawa
Shanghai
Paris
Berlin
Hong Kong
Mumbai
Jakarta
Tokyo
Kuala
Lumpur
Mexico City
Auckland
Manila
Moscow
Singapore
Cape Town
London
New York
City
San
Francisco
Cheap Date
in
Local
Currency
AUD 111.96
BRL 135.43
CAD 78.33
CNY 373.87
EUR 75.57
EUR 76.49
HKD 467.03
INR 1,379.64
IDR 314,700
JPY 10,269.07
MYR 117.85
MXN 423.93
NZD 111.52
PHP 1.182.88
RUB 2,451.24
SGD 77.89
ZAR 388.58
GBP 73.29
USD 93.20
USD 88.72
Exchange
Rate Quote
USD = 1 AUD
USD = 1 BRL
USD = 1 CAD
USD = 1 CNY
USD = 1 EUR
USD = 1 EUR
USD = 1 HKD
USD = 1 INR
USD = 1 IDR
USD 1 JPY
USD = 1
MYR
USD = 1
MXN
USD = 1 NZD
USD 1 PHP
USD 1 RUB
USD 1 SGD
USD = 1 ZAR
USD 1 GBP
1 USD
1 USD
Exchange
Rate
7 April 2014
0.9290
0.4363
0.9106
0.1619
1.3702
1.3702
0.1289
0.0167
0.0001
0.0097
0.3048
0.0769
0.8595
0.0222
0.0283
0.7939
0.0946
40
1.6566
1.0000
1.0000
Cheap Date
in
In USD
Relative
to NYC
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