# Simple cross-rate table question

I am trying to self-study and came across this question, I am not sure how to answer this.

I think I should transform all of the product's quoted prices to USD then compare them, is that correct?

The table below shows retail prices of a single product in three countries. Use the cross-rate table and state which country’s currency is relatively (i) under-valued, and (ii) over-valued.

• You are on the right track. Sep 24 at 18:10

A Big Mac costs £3.49 in Britain and US\$5.65 in the United States. The implied exchange rate is 0.62. The difference between this and the actual exchange rate, 0.73, suggests the British pound is 15.9% undervalued.