1 point 1. The U.S. three-month interest rate (unannualized) is 1%. The Canadian three-month interest rate (unannualized) is 4%. Interest rate parity exists. The expected inflation over this period is 5% in the U.S. and 3% in Canada. A call option with a three-month expiration date on Canadian dollars is available for a premium of $.02 and a strike price of $.63. The spot rate of the Canadian dollar is $.65. Assume that you believe in purchasing power parity. What is the premium on a future contract? * -2% O 1.94% 02% O -1.94% * 2. Refer to the question no 1. What is the futures rate? 1 point $0.6621 0.6370 $0.6379