1. If the U.S. interest rate is 3% and the Canadian interest rate is 6%, should a U.S. investor invest in Canada? Assume the real interest rate is the same in both countries.

   Check all that apply:

   No, because the Canadian dollar is likely to depreciate due to purchasing power parity.

   No, because the Canadian dollar is likely to depreciate due to the international Fisher effect.

   Yes, because the Canadian dollar is likely to appreciate due to purchasing power parity.

   Yes, because the Canadian dollar is likely to appreciate due to the international Fisher effect.

   Yes, because the interest rate is higher.