According to the Big Mac Index, the implied PPP exchange rate is Mexican peso 8.50/$1 but the actual exchange rate is peso 10.80/$1. Thus, at current exchange rates the peso appears to be ________ by ________.

Select one:

a. overvalued; approximately 21%

b. undervalued; approximately 27%

c. undervalued; approximately 21%

d. overvalued; approximately 27%