Calculate the real exchange rate between China and US

Reference no: EM133219387

Question - An iPhone price in China is RMB 8,700; The same model is sold in the U.S. at $999. If the current exchange rate between RMB and dollar is RMB 6.35/$.

1. Please convert the RMB price into U.S. dollar price.

2. Please calculate the real exchange rate between China and U.S.

3. Based on your answer, which currency is overvalued and why?

Reference no: EM133219387

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