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If A Big Mac cost $7 in the US and a Big Mac cost in Saudi is SAR21. Using PPP, examine the implied exchange rate
If A Big Mac cost $7 in the US and a Big Mac cost in Saudi is SAR21. Using PPP, examine the implied exchange rate for Saudi SAR against USD with clear steps. If the current spot rate is SAR3.75 / USD, does PPP hold? Does SAR undervalue or overvalued? By how much it is under/overvalued?
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Step 11 Current Spot Rate SO SAR 375U SD Thus USD is the base curency here 7 ...
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Understanding Business Statistics
Authors: Stacey Jones, Tim Bergquist, Ned Freed
1st edition
1118145259, 978-1118145258
