Does the Law of One Price hold? An empirical investigation
- Choose five (5) countries
- Find five (5) products that the countries have in common.
- Find (average) price for the product at local currency term.
- Convert the price into a common currency (US$).
I.Do you find an evidence of the law of One Price (LOP) for the products? If yes, what are those products? If not, why? Give your opinion.
II.Calculate and find whether there are under-valuation or overvaluation of currencies?
Here are some Example of products you can pick for the Assignment and compare with five different countries you decide to choose. Also include Canada as one of the countries.
•Crude Oil, iPhone (same model), Samsung (same model), Huawei(same model), Burger(Burger King), Latte, Mocha, Cappuccino, Espresso, and any commonly used goods.
Sample Answer
