Question

Comparing Cheap Dates Around the World. Comparison of prices or costs across different country and currency environments requires translation of the local currency into a single common currency. This is most meaningful when the comparison is for the identical or near-identical product or service across countries. Deutsche Bank has recently started publishing a comparison of cheap

dateslong dash—and

evening on the town for two to eat at McDonald's, see a movie, and drink a beer. Once all costs are converted to a common currency, the U.S. dollar in this case, the cost of the date can be compared across cities relative to the base case of a cheap date in USD in New York City.

If the exchange rate in Shanghai was CNY 6.55 divided by USDCNY6.55/USD ,what would be its cost in USD and relative to a cheap date in New York City

?

China

Shanghai

CNY

373.87

USD = 1 CNY

0.1619

Answer 1

Given exchange rate is CNY = 6.55/USD
So, USD = 1/6.55 CNY
Cheap date in USD = Cheap date in CNY * Exchange rate
= 373.87 * (1/6.55) = 57.08
Cheap date in USD = 57.08
Relative to cheap date in New York is calculated as = Cheap date in NYC/93.2
There fore Relative to cheap date in New York = 57.08/93.2 = 0.6124 = 61.24%
Note: "Relative to cheap date in New York is calculated as = Cheap date in NYC/93.2" was found from the source from which the data was taken (in the question only one row of the entire table is shown, but refer the entire table to find the data)