Starbucks (Croatia).Starbucks opened its first store in Zagreb, Croatia, in October 2010. In Zagreb, the price of a tall vanilla latte is 25.71 Croatian kunas (kn or HRK). In New York City, the price of a tall vanilla latte is $2.64. The exchange rate between Croatian kunas and U.S. dollars is kn5.6288=$1. According to purchasing power parity, is the Croatian kuna overvalued or undervalued?

The percentage of overvaluation or undervaluation is