Each year The Economist publishes its Big Mac Index comparing the price of the famous sandwich across currencies to test the purchasing power parity of exchange rates. In this question, assume that the average U.S. price of a Big Mac is $4.50 (1 point). a. An NYU student studying in Copenhagen withdrawing cash at an ATM machine notices the exchange rate is 6.78 Danish krone (DKK) per USD. If the law of one price holds, how much should she expect to pay for her Big Mac sandwich at the nearest McDonalds? b. The student is surprised to see a Big Mac price in a Copenhagen McDonalds of DKK 35.00. What is the over- or undervaluation of the DKK versus the U.S. dollar? C. Another NYU student learned about the Big Mac price difference from a classmate and decided to profit from this. He heard that McDonalds issued Mac Coins to celebrate the sandwich's 50th anniversary which redeemable at any McDonalds in the world for one Big Mac. How could he theoretically earn an arbitrage profit assuming he has no transaction costs, and what is that return in USD terms per Mac Coin? Each year The Economist publishes its Big Mac Index comparing the price of the famous sandwich across currencies to test the purchasing power parity of exchange rates. In this question, assume that the average U.S. price of a Big Mac is $4.50 (1 point). a. An NYU student studying in Copenhagen withdrawing cash at an ATM machine notices the exchange rate is 6.78 Danish krone (DKK) per USD. If the law of one price holds, how much should she expect to pay for her Big Mac sandwich at the nearest McDonalds? b. The student is surprised to see a Big Mac price in a Copenhagen McDonalds of DKK 35.00. What is the over- or undervaluation of the DKK versus the U.S. dollar? C. Another NYU student learned about the Big Mac price difference from a classmate and decided to profit from this. He heard that McDonalds issued Mac Coins to celebrate the sandwich's 50th anniversary which redeemable at any McDonalds in the world for one Big Mac. How could he theoretically earn an arbitrage profit assuming he has no transaction costs, and what is that return in USD terms per Mac Coin