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One year ago the spot rate of U.S. dollars for Canadian dollars was $0.92/C$1. Since that time the rate of inflation in the U.S. has

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One year ago the spot rate of U.S. dollars for Canadian dollars was $0.92/C$1. Since that time the rate of inflation in the U.S. has been 4% greater than that in Canada. Based on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately: $0.9568/C$. $0.9672/C$. $1.0400/C$. $0.9776/C$

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