If a "Big Mac" Costs $4

If a "Big Mac" costs $4.00 in the United States and 5 francs in Switzerland, then the implied "purchasing-power-parity" exchange rate using the "Big Mac" is __________. If the actual exchange rate in the market is 1 franc = $0.90, then an economist would say that the actual Swiss franc is __________ in comparison with its "purchasing-power-parity" rate.

A) 1 franc = $1.25; overvalued
B) 1 franc = $1.25; undervalued
C) 1 franc = $0.80; overvalued
D) 1 franc = $0.80; undervalued