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If the relative Purchasing Power Parity is hold between the US and the UK and the US dollar has been appreciated against the sterling pound
If the relative Purchasing Power Parity is hold between the US and the UK and the US dollar has been appreciated against the sterling
pound by 10 percent, but there is
partial (60%) exchange rate pass through.
What should be the price of the iPhone 14 pro in the UK (in
E) if it costs $1,000 in the US and the exchange rate is 0.79 USD?
How would this result into arbitrage?
Your answer should be on
British Sterling Pound not US dollar.
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