Suppose the spot exchange rate for the Canadian dollar is Can$1.03 and the six-month forward rate is Can$1.05. 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$2.59? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 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?

Suppose the spot exchange rate for the Canadian dollar is Can$1.03 and the six-month forward rate is Can$1.05. 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$2.59? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 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? a. U.S. dollar $ b. 3.11 c. Worth more, a U.S. dollar or a Canadian dollar? Cost in U.S. dollars U.S. dollar selling at a premium or a discount relative to the Canadian dollar Which currency is expected to appreciate in value? Which country do you think has higher interest ratesthe United States or Canada? premium U.S. dollar d. e. United States