Question

Please show all calculations and explain the answer in detail. If using Excel please show data.

practice #7

If the current exchange rate is 105 Japanese yen per U.S. dollar, the price of a Big Mac hamburger in the United States is $3.41, and the price of a Big Mac hamburger in Japan is 380 yen, then other things equal, the Big Mac hamburger in Japan is ______________ (over-valued/under-valued/fairly-valued).

Answer #1

The current exchange rate between Japanese yen per U.S. dollar
is = **105 Japanese yen per U.S. dollar.**

If price of a Big Mac hamburger in the United States is
**$3.41.**

On the basis of exchange rate the price of a Big Mac hamburger in Japan should be -

(Converting dollars into Yen as 1 $ = 105 yen)

3.41 $ = 3.41 * 105 yen

**= 358.05 yen**

But the price of a Big Mac hamburger in Japan is 380 yen, it
should be **358.05 yen,** hence the Big Mac hamburger
in Japan **is over-valued.**

**Hope it helps!**

Please show all calcualtions if applicable. Please explain
concepts in detail. If using excel, please show data.
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Please show all calculations and be detailed with your answer.
If using Excel, please show data.
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The table below contains the price of a Big Mac in different
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Big Mac Price
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Actual
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45
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Please show all calculations and formulas. If using Excel (or
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