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Suppose the spot exchange rate for the Canadian dollar is Can$1.15 and the six-month forward rate is Can$1.17. a. Which is worth more, a U.S.
| Suppose the spot exchange rate for the Canadian dollar is Can$1.15 and the six-month forward rate is Can$1.17. |
| a. | Which is worth more, a U.S. dollar or a Canadian dollar? |
| b. | Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$3.00? (Round your answer to 3 decimal places, e.g., 32.161.) |
| c. | Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar? |
| d. | Which currency is expected to appreciate in value? |
| e. | Which country do you think has higher interest rates - the United States or Canada? |
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The Everything Guide To Day Trading
Authors: David Borman
1st Edition
1440506213, 978-1440506215
