What is a challenge in valuing a currency based on a PPP model such as the Big Mac Index? Currency prices can remain relatively under or overvalued for extended periods of time. There are not enough countries that sell Big Macs to make the index worthwhile. Currency prices immediately adjust to their fair values so there is no arbitrage opportunity.

What is a challenge in valuing a currency based on a PPP model such as the Big Mac Index? Currency prices can remain relatively under or overvalued for extended periods of time. There are not enough countries that sell Big Macs to make the index worthwhile. Currency prices immediately adjust to their fair values so there is no arbitrage opportunity