1.Briefly describe the main differences between a forward contract and a future contract in foreign currency exchange.

2.Papa Johns Pizza (NASDAQ:PZZA) opened its first store in Suzhou, China. The price of a large Epic Meatz pizza in Suzhou is 119.00Chinese yuan. The price of the same Epic Meatz pizza is $12.90 in Chicago, IL. The exchange rate between Chinese yuan () and U.S dollars is 6.81/$.(a) According to purchasing power parity (applied to Papa Johns prices), is the Chinese yuan overvalued or undervalued? By what percent?(b) Fill in the four missing cells in the table below

Country	Currency	BigMac Price in Local Currency	Actual Exchange Rate (Foreign Currency per Dollar)	Local BigMac Price in Dollars	Implied PPP of the U.S Dollar	%
(Implied Exchange Rate)	Under/Over Valuation Against the US$
U.S.	Dollar	4.89	1
Malaysia	ringgit		3.6	2.11	1.55	-56.8%
Brazil	real	13.5	2.9	4.66		-4.8%
Norway	krone	48.9	0.96	50.94	10.00	25.0%