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You are provided the follow set of data regarding Currency Values in a Tradable Commodity. Over Value/Under Value Currencies vs. USD Home Country Home Country
You are provided the follow set of data regarding Currency Values in a Tradable Commodity.
Home Country | Home Country | Local Currency | In US Dollars | Actual Dollar Exchange Rate | Implied PPP of the Dollar | Under/Over Valuation against the USD |
United States | USD | 5.51 | ||||
Brazil | BRL | 16.9 | 4.4 | ?? | ?? | ?? |
Sweden | SEK | 51 | 5.83 | ?? | 9.26 | ?? |
Switzerland | CHF | 6.5 | 6.54 | .99 | 1.18 | ?? |
Hong Kong | HKD | 20 | 2.55 | 7.84 | ?? | ?? |
To determine the best arbitrage opportunity, you must first identify the most Overvalued and most Undervalued currencies in that commodity versus the U.S. Dollar.
The most (a) Overvalued and (b) Undervalued currencies versus the U.S. Dollar, based on this underlying commodity, are:
A: (a) CHF, (b) HKD
B: (a) BRL, (b) SEK
C: (a) HKD, (b) SEK
D: (a) SEK, (b) HKD
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