Does the difference in prices confirm the theory

Reference no: EM133500779

Case: The iPhone 12 costs Rs. 79,900 in India, $830 in the U.S. (roughly 60,900), JPY 85,800 (roughly Rs. 59,800) in Japan and CAD 1,129 (roughly Rs. 63,000) in Canada. You are told that the nominal exchange rates are 74.55 Rs/$, 104.66 JPY/$ and 1.33 CAN/$.

i. Where would you buy the Iphone if you could magically be in the 4 countries today?

ii. Can you explain the difference in prices, if any? To what theory does it relate to?

iv. Does the difference in prices confirm the theory? Explain why it does or why it does not.

Reference no: EM133500779

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