The Argentine peso was fixed through a currency board at Ps1.00/$ throughout the 1990s. In January 2002 the Argentine peso was floated. On January 29, 2003 it was trading at Ps3.20/$. During that one year period Argentina's inflation rate was 20% on an annualized basis. Inflation in the United States during that same period was 2.2% annualized.

1) If PPP holds, the exchange rate in January 2003 would be Ps/$ ( in 4 decimals).

2) The Argentine peso undervalued on an annualized basis by%( in 2 decimals).