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Suppose you had $10,000 to travel for a month to another country, where would it be? What is their currency? What are the spot and
Suppose you had $10,000 to travel for a month to another country,
- where would it be?
- What is their currency?
- What are the spot and forward rate on that currency against USD?
- How much is Big Mac in that country ( if they sell it there)?
- Does the price indicate overvaluation against USD or undervaluation? Explain your answer.
- Does the PPP hold with that country? Are the goods and services the same price?
- What about Relative PPP?
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