Question
INTERNATIONAL FINANCE (Please provide answers with appropriate calculations) 1. Below table compare the price of a robot vacuum cleaner, in London and Sweden. Price in
INTERNATIONAL FINANCE
(Please provide answers with appropriate calculations)
1. Below table compare the price of a robot vacuum cleaner, in London and Sweden.
| Price in London (GBP) | Price in Sweden (Swedish Krona) | Actual Interest Rate |
|
100.00 |
kr 980 |
GBP / SEK = 11.65 |
-
- Determine if the robot vacuum cleaner in both countries being priced equally. (4 marks)
-
- Is the robot vacuum cleaner in Sweden undervalued or overvalued? (2 marks)
-
- Calculate the implied Purchasing Power Parity (PPP) rate of exchange based on the two product prices. (4 marks)
-
- Calculate the percentage of the robot vacuum cleaner in Sweden being undervalued or overvalued. (4 marks)
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Theory Of Constraints Handbook
Authors: James Cox, John Schleier
1st Edition
0071665544, 978-0071665544
