_{The following are the expected interest rates and inflation rates in Canada and Britain respectively over next six months}

_{COUNTRY INTEREST RATE INFLATION RATE}

_{Canada 4% 2%}

_{Britain7% 4%}

_{the spot rate between Canadian dollar (C$) and Great British pound is 2C$=1GBP}

_{REequired; determine the six months forward exchange between of the two currencies using the following approaches}

_{a) interest rate parity}

_{b)purchasing power parity}