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ex407fsp0907a - MGMT 407.07 Spring 2009 FINAL EXAMINATION...

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MGMT 407.07 Spring 2009 FINAL EXAMINATION Name_______________ This is an open-book and open-notes examination. Write answers on a separate sheet of paper. Show all work for full credit. In multipart questions you may assume your prior answers are correct. Ask the instructor when you do not understand a question. 1. (50 points and 25 minutes)In the May 9 (online) issue of the Economist, the following “Burgernomics” data is recorded: Big Mac Prices Country Local US$ Implied PPP Actual Exchange Under(-)/over(+) Currency of the US $ rate: Jan 30 valuation against the dollar, % USA $3.54 $3.54 Turkey lire 5.15 3.23 1.45 1.64 -12 China yuan 12.5 1.83 3.53 6.84 -48 Poland zloty 7 -43 (10) a. Suppose you are a Turkish citizen. What is the actual exchange rate of yuan per lire. (10) b. What is the real exchange rate the lire in terms of the yuan? (10) c. If you believed in the PPP theory, should you be a ___________ (buyer/seller) of lire? Explain why. (20) d. Complete the column entries for Thailand. 2. (55 points and 30 minutes) Suppose you have been asked to consult for Vietnam, who
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