Question
17-8 Purchasing Power Parity In the spot market 7.8 pesos can be exchanged for 1 US dollar. A pair of headphones costs $15 in the
17-8 Purchasing Power Parity
In the spot market 7.8 pesos can be exchanged for 1 US dollar. A pair of headphones costs $15 in the united States. If purchasing power parity holds, what should be the price of the same headphones in Mexico?
The answer is 117 pesos--show all work and formulas to support answer.
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
16th Edition
013749601X, 978-0137496013
