Starbucks opened its first store in Zagreb, Croatia in October 2010. The price of a tall vanilla

Question:

Starbucks opened its first store in Zagreb, Croatia in October 2010. The price of a tall vanilla latte in Zagreb is 25.70kn. In New York City, the price of a tall vanilla latte is $2.65. The exchange rate bewteen Croatian kunas (kn) and U.S. dollars is kn5.6288/$. According to purchasing power parity, is the Croatian kuna overvalued or undervalued?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...