Question: 3. value: 11.11 points Suppose the spot exchange rate for the Canadian dollar is Can$1.02 and the six-month forward rate is Can$1.04. a. Which is

3. value: 11.11 points Suppose the spot exchange rate for the

3. value: 11.11 points Suppose the spot exchange rate for the Canadian dollar is Can$1.02 and the six-month forward rate is Can$1.04. a. Which is worth more, a U.S. dollar or a Canadian dollar? U.S. dollar O Canadian dollar b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$3.15? (Round your answer to 3 decimal places, e.g., 32.161.) Cost in U.S. dollars $ c. Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar? O Discount O Premium d. Which currency is expected to appreciate in value? O Canandian dollar O U.S. dollar e. Which country do you think has higher interest rates - the United States or Canada? O United States O Canada

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