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Assume that the price of a bushel of corn EUR 3

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Assume that the price of a bushel of corn EUR 3.50 in the Euro Zone and USD 4.00 in the US market. Currently the USD/EUR spot exchange rate is: X₀^USD/EUR = 1.05. Using the corn prices as a price benchmark, according to ILOP…

A. The USD is overvalued against the EUR

B. The USD is undervalued against the EUR

C. The USD is correctly priced according to ILOP

D. There is not enough information provided to answer this question