Question 2 :The price of a Big Mac in the London is 3.29 and the price in
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Question 2:The price of a Big Mac in the London is 3.29 and the price in Zurich is SFr 6.5.Using the Big Mac Index, one may calculate the implied PPP exchange rate.The actual quoted exchange rate is SFr 1.2386/.One wishes to compare Swiss francs versus the pound. At the current quoted exchange rate, the Swiss franc appears to be:
a.Overvalued by approximately 37.7 %
b.Overvalued by approximately 59.5 %
c.Undervalued by approximately 37.7 %
d.Undervalued by approximately 59.5 %
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