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Suppose the spot exchange rate for the Canadian dollar is Can$1.07 and the six-month forward rate is Can$1.09. a. Which is worth more, a U.S.
Suppose the spot exchange rate for the Canadian dollar is Can$1.07 and the six-month forward rate is Can$1.09.
| a. | Which is worth more, a U.S. dollar or a Canadian dollar? | ||||
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| b. | Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.60? (Round your answer to 3 decimal places. (e.g., 32.161)) |
| Cost in U.S. dollars | $ |
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