TRUE OR FALSE.

1.a) (10 points) Suppose the nominal exchange rate between the Canadian dollar and the US dollar ECAD/US is equal to 1.30 Canadian dollars per US dollar and the nominal exchange rate between the Mexican peso and the US dollar EMEX/US is equal to 26 pesos per US dollar. Explain if the following statement is true, false or uncertain: ' 'If one liter of Maple syrup has a price of 12 Canadian dollars, then the price of one liter of Maple syrup in Mexican pesos is equal to 240 pesos." No credit if you do not include your calculations (step by step). 1.b) (15 points) Check if the following statement is true, false or uncertain: ' 'Combining the covered interest parity (CIP) with absolute Purchasing Power Parity (PPP) we can obtain the real interest parity equation and the Fisher equation." In answering this question do not forget to explain what is the covered interest parity, the PPP theory, the Fisher effect and the real interest parity. Use equations to support your