Assume that the price of a Big Mac is $$4\mathrm{.}00$ in the U$.$S$.$ and $2\mathrm{.}5$ pounds sterling in Britain.

According to Purchasing Power Parity $($PPP$),$ what exchange rate would we expect?

Assume that the actual exchange rate of dollars to pounds is $1\mathrm{.}30.$ Which arbitrage strategy can be derived from