Question
1. A Big Mac costs MXN 52, and CAD 5.47. What is the purchasing power parity exchange rate between MXN and CAD? Please give your
1. A Big Mac costs MXN 52, and CAD 5.47. What is the purchasing power parity exchange rate between MXN and CAD? Please give your answer in MXN per CAD. Please give your answer to at least two decimal places.
2. This question is a continuation of the previous question. If the MXN/CAD exchange rate is currently MXN 9 per CAD, and Mexican and Canadian investors are both free to make whatever trades they wish, would you expect the MXN/CAD exchange rate to go up or down? Why?
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Foundations Of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
11th Canadian Edition
1259024970, 978-1259265921
