How do you know if a currency is overvalued or undervalued

I have 2 questions with answers that don't seem to be matching:

If real exchange rate qUS/qforeign is more than 1, then US currency is said to be undervalued correct?

Question 1: You are given the following information. The current dollar-pound exchange rate is $2 per pound. A U.S basket that costs $100 would cost $120 in the United Kingdom. For the next year, the Fed is predicted to keep U.S. inflation at 2% and the Bank of England is predicted to keep U.K inflation at 3%. The speed of convergence to absolute PPP is 15% per year.

Answer: The dollar is overvalued because real exchange rate is 1.29 (=$120/$100). shouldn't it be undervalued since it is more than 1?

Question 2:

Suppose a new car costs 210,000 Mexican pesos in Mexico, while the same car costs $19,500 in the United States. The nominal exchange rat is currently at E$/Peso = $.10/Peso. If we assume PPP to hold, is the dollar under or overvalued? If so, by how much?

qUS/qPESO= (210,000)*(.1)/(19,500)=1.0769. The answer is that the US is overvalued as well.

Why is it that qUS/qForeign are both more than one but US currency is overvalued in one of them but undervalued by another. Is the answer wrong or am i missing something?