Comparing Cheap Dates Around the World.

Comparison of prices or costs across different country and currency environments requires 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—an 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 on the next page, answer the following questions.

a. Which city in the table truly offers the cheapest date?

b. Which city in the table offers 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?

Country City Cheap Date in Local Currency Exchange Rate Quote Exchange Rate 7 April 2014 In USD Relative to NYC Australia Sydney AUD 111.96 USD = 1 AUD 0.9290 ______ ____%

Brazil Rio de Janeiro BRL 135.43 USD = 1 BRL 0.4363 ______ ____%

Canada Ottawa CAD 78.33 USD = 1 CAD 0.9106 ______ ____%

China Shanghai CNY