Use the globalEDGE^TM site to complete the following exercises:

1. One component of learning about another country or region is to understand the relationship of its currency with others on the world currency market. As such, you are assigned the duty of ensuring the availability of 100,000 yen for a payment scheduled for next month. Considering that your company possesses only U.S. dollars, identify the spot and forward exchange rates. What are the factors that influence your decision to use the spot or forward exchange rate? Which one would you choose? How many dollars must you spend to acquire the amount of yen required?



2. Sometimes, analysts use the price of specific products across locations to compare currency valuation and purchasing power. In fact, the Big Mac Index compares the purchasing-power parity of many countries based on the price of a Big Mac. Locate the latest edition of this index that is accessible. Identify the five countries (and the currencies) with the lowest purchasing-power parity according to this classification. Which currencies, if any, are overvalued?