To compute the implied exchange rate between the currencies of any 2 countries based on Law of One Price, you search for an identical product that is traded at the 2 countries, and then answer the following questions.

(a) What product have you chosen? Why do you think it could be a good candidate to determine the implied exchange rate by the Law of One Price?

(b) What are the prices of the chosen product in terms of local currencies in the 2 countries? Show the information you obtained and the source.

(c) What is the spot exchange rate? Show the information you obtained and the source.

(d) Calculate the implied exchange rate based on Law of One Price.

(e) How much is the exchange rate undervalued or overvalued?

(f) Do you think will be the long-run movement of exchange rate, assuming Law of One Price holds in the long-run?