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Over a year the consumer price index changed from 200 to 204 in the US....

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Finance

Over a year the consumer price index changed from 200 to 204 in the US. For the same period the Canadian inflation rate was 5%. The exchange rate was USD 0.95 per CAD at the beginning of the year. What should be the exchange rate at the end of the year if relative PPP were to hold? Round the answer to two decimal places and report it without any currency symbols.

Suppose that a consumption bundle costs $300 per unit in New York and SGD 450 in Singapore. Suppose further that the spot exchange rate in the market on that day is USD 0.80 per SGD.

Based on the PPP exchange rate is the SGD considered over or undervalued relative to USD?

Over valued

Undervalued

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