a. Assume that youve taken a short position in Canadian dollar for 1M for a year. Using the following information, explain whether UIRP holds or not. Also, explain as a risk-neutral investor which currency youre likely to invest in and why? r=5%; r*=6%; S (spot rate): 1 USD=1.25CAD; Se: 1USD-1.22. b. Assuming all the information remains the same except Se. Se replaced by F. At what forward rate, the investor will remain indifferent to choosing between Canadian or US strategy? To ensure the indifferent status of the investor, do you need to have CAD depreciated or appreciated. Show your work.