2. Suppose the spot exchange rate is 1.29 CAD/USD and the six-month forward ex- change rate is 1.28 CAD/USD. (a) Assuming absolute Purchasing Power Parity holds, what is the cost of a Keith Beer in the u.s. if its price in Canada is 2.50? Why might the beer actually sell at a different price in the U.S.? (b) Is the USD selling at a premium or a discount relative to CAD? (c) Which currency is expected to depreciate in value? (d) Which country do you think has higher interest rates - U.S. or Canada?