Suppose the spot exchange rate for the Canadian dollar is Can$1.08 and the six-month forward rate is Can$1.10.

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$3.45? (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 ratesthe United States or Canada?