Question: Remark: No hand written, please do in typing format. Question 3. Below table compare the price of laser engraver machine in Malaysia and Vietnam. Price

Remark: No hand written, please do in typing format.

Question 3.

  1. Below table compare the price of laser engraver machine in Malaysia and Vietnam.

Price in

Malaysia Ringgit

(MYR)

Price in

Vietnamese Dong

(VND)

Actual

Exchange Rate

1,500

8,000,000

MYR/VND = 5,407.62

  1. Determine if the laser engraver machine being priced equally. (4 marks)
  2. Is the laser engraver machine in Vietnam undervalued or overvalued? (2 marks)
  3. Calculate the implied Purchasing Power Parity (PPP) rate of exchange based on the two product prices. (4 marks)
  4. Based on the implied PPP, calculate the percentage of the laser engraver machine in Vietnam being undervalued or overvalued. (4 marks)

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