In practice, people often use The Big Mac index, which provides an interesting perspective into the determination of foreign exchange rates; in the United States, a Big Mac is selling at a price of $5.06, while it costs 5.85 GEL in Georgia. The official exchange rate is $1 = 2.41 GEL. IS GEL overvalued or undervalued? What should be the implied exchange rate? The GEL is undervalued, the implied exchange rate should be $1 = 1.16 GEL. The GEL is correctly valued, the implied exchange rate should be $1 = 2.41 GEL. The GEL is overvalued, the implied exchange rate should be $1 = 1.16 GEL. The GEL is overvalued, the implied exchange rate should be $1 = 0.86 GEL. O The GEL is undervalued, the implied exchange rate should be $1 = 0.86 GEL. 2.5 points Save Answer QUESTION 4 The current exchange rate is 0.92 per U.S. dollar, but you think that U.S. dollar will appreciate to 0.95 per U.S. dollar. If you know the euro-denominated bond is yielding 3%, what return would you expect in U.S. dollars? 3% There is not enough information given to answer this question. -0.25% -3% O 0.25%