B. Consider the following prices for government bonds and foreign exchange in Canada and the United States. Assume that both government securities are one-year bonds, paying the face value of the bond one year from now. The exchange rate, El, stands at US$1.00 = C$1.33. The face values and prices on the two bonds are given by: Face Value P rice Canada C$1000.00 C$943.3962 United States US$1000.00 US$961.5384 1. Compute the nominal interest rate on each of the bonds. 2. Compute the expected next year exchange rate that is consistent with uncovered in- terest parity. 3. Your friend expects the exchange rate next year to be US$1.00 = C$1.40. Which bond should your friend buy? Why? 4. You expect the exchange rate next year to be US$1.00 = C$1.30. Which bond should you buy? Why