Brief description on the concept of purchasing power parity

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Assignment about purchasing power parity

Big Macs are a relatively homogeneous product in which the recipe is roughly the same throughout the 118 countries in which McDonalds conducts business. As a light -hearted test of purchasing power parity, The Economist began publishing the Big Mac Index. Comparing a country's PPP rate with the market determined exchange rate is a test of whether a country's currency is overvalued or undervalued.

For the purpose of this assignment, choose any 10 countries where McDonald's sells their Big Mac and write a report on the concept of Purchasing Power Parity keeping Big Mac as the base.

Your report should cover the following:

- A brief description on the concept of purchasing power parity including the problems and factors affecting the purchasing power parity.

- Analysis & discussion on the price of Big Mac in local currency against US dollars in 10 selected countries.

- Determine how much a currency of a country is overvalued or undervalued against US dollars after necessary calculations and provide the justification whether PPP holds good for Big Mac.

- Relevant Conclusions.

Attachment:- International Finance.zip

Reference no: EM132283953

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Understanding of relevant concepts & Issues with reference to appropriate theoretical background, illustrations.(25 %)? Evidence of exemplary understanding of relevant theory and research. Reference to appropriate theoretical background provides support to the discussion. ? Illustrations are provided that amplify the theoretical background.

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Criteria Information and Research& Referencing Detailed information search (15 %) Outstanding 100 ? Exceptional use of a wide range of appropriate and current sources, focusing on research based reviews indicating personal research and critical awareness of their status and relevance. ? Accurate use of Harvard Referencing style. ? Student recognizes the concept of intellectual property, can defend him / herself if challenged, and can properly incorporate the ideas / published works of others into their own work building upon them. ? Skillful use of credible, relevant and current sources of information that augments quality of discussion

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5. This is an individual assignment and carries a 60 % weighting of the module grade. 6. This assignment follows areportformat and must be original and creative. An analytical piece of work is required. The use of ‘cut and paste’ approach will be penalized. It must be presented in a structured manner, with appropriate cover page, content page, introduction, body (with appropriate heading / sub-headings), conclusion, references, page numbered and any required appendices. 7. Your report should be word processed and professionally presented. The length of your report should be of 2500words (+/- 10%), presented in text of font size 12 with 1.5 line spacing. Please state the exact word count at the end of the assignment. 8. The cover page should be attached with the assignment and uploaded through MOVE (on-line. Name of the student, The Programme, Module Title, Assignment Title and number of words must be reflected on the cover sheet.

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INSTRUCTIONS Your work will be graded on the following aspects: 1. This is an individual Assignment 2. The assignment MUST be submitted on-line (through MOVE) on or before the due date. 3. Your assignment shall reflect the depth and breadth of your original analyses in a clear and coherent manner. 4. Any reference to authors and other writers shall be quoted with due acknowledgement in your assignment report using the Harvard Referencing System. For details of Harvard referencing style refer the student’s hand book page 40-42 section7.2.

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Grading Criteria Max. Marks Understanding the relevant concepts 20% Awareness of the relevant issues 25% Argument & Analysis 35% Structure & Completion of tasks 10% Language 5% Information collection &Referencing 5%

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