The US price of a base model iPhone 11 is USD700. The Singapore price for the same phone is SGD1,150. The exchange rate is 1.36SGD to 1USD. Which of the following is correct? 1. Based on iPhone prices, the USD is undervalued when compared to the SGD. 2. Based on iPhone prices, the PPP exchange rate is 1.64SGD to 1USD. 3. There is an incentive to purchase iPhone 11's in Singapore to sell in the US. O. 1 and 3 only. O. 1, 2 and 3. O. 2 only. O. 3 only. O. 1 and 2 only.
The US price of a base model iPhone 11 is USD700. The Singapore price for the same phone is SGD1,150. The exchange rate is 1.36SGD to 1USD. Which of the following is correct? 1. Based on iPhone prices, the USD is undervalued when compared to the SGD. 2. Based on iPhone prices, the PPP exchange rate is 1.64SGD to 1USD. 3. There is an incentive to purchase iPhone 11's in Singapore to sell in the US. O. 1 and 3 only. O. 1, 2 and 3. O. 2 only. O. 3 only. O. 1 and 2 only.
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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14. The US price of a base model iPhone 11 is USD700. The Singapore price for the same phone is SGD1,150. The exchange rate is 1.36SGD to 1USD. Which of the following is correct?
1. Based on iPhone prices, the USD is undervalued when compared to the SGD.
2. Based on iPhone prices, the PPP exchange rate is 1.64SGD to 1USD.
3. There is an incentive to purchase iPhone 11's in Singapore to sell in the US.
O. 1 and 3 only.
O. 1, 2 and 3.
O. 2 only.
O. 3 only.
O. 1 and 2 only.
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