Suppose the spot exchange rate for the U.S. dollar is CAD$1.18 and the six-month forward rate is CAD$1.13.

a. Which is worth more, a U.S. dollar or a Canadian dollar?

multiple choice 1

• U.S. dollar

• 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 CAD$2.19? (Round the answer to 2 decimal places. Omit $ sign in your response.)

Cost in U.S dollar $

c. Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar?

multiple choice 2

• Premium

• Discount

d. Which currency is expected to appreciate in value?

multiple choice 3

• Canadian dollar

• U.S. dollar

e. Which country do you think has higher interest ratesthe United States or Canada?

multiple choice 4

• Canada

• U.S

Plz help asap