Quantitative Problem: In the spot market, 1

Finance Oct 05, 2020

Quantitative Problem: In the spot market, 1.93 Brazilian reals can be exchanged for 1 U.S. dollar. An Apple iPad Air costs $540 in the United States. If purchasing power parity (PPP) holds, what should be the price of the same iPad Air in Brazil? Do not round intermediate calculations. Round your answer to the nearest whole number.

Expert Solution

It is given that :

1 USD = 1.93 Brazilian reals

Apple iPad Air cost = $540

Apple iPad Air cost in Brazil = $540*1.93

Apple iPad Air cost in Brazil = 1042.2 reals

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