provided is all the information given however here are the currency conversions for dollars to yuan, euro, peso, rupees, VND

1 USD is Yuan = 6.36

1 USD is Euro = 0.85

1 USD is Peso = 19.85

1 USD is Rupees = 73.70

1 USD is VND = 22,426.56

This question deals with PPP and exchange rates conversions. Define the market exchange rate as the foreign currency price for 1 US Dollar e.g. 1 USD=1.27 CAD (Canadian Dollar).

(a) Find the exchange rates for various countries listed below. You can use websites such as Yahoo Currency Converter to aid you in your answers. Country Currency Exch Rate Price of BM BM exch rate (XR) in local currency (BMXR) USA USD 1 4.93 1 China Yuan 22.4 France Euro 4.25 Mexico Peso 54 India Rupees 190 Vietnam VND 60000

(b) Using the local prices of Big Mac's can you find out how much should the BM exchange rate (relative to a US Big Mac) be? (Since Big Macs are identical across the world an American Big Mac and a Chinese Big Mac would be the same. Therefore, you would use the two local prices to figure out the BM exchange rate).

(c) Can you tell which of the currencies are overvalued and which are undervalued? A currency is overvalued if the "market" exchange rate suggests that the currency is more expensive than what it should be if one focused on Big Macs only.