The spot exchange rate (S) between USS and AU$ is AUS1.29/USS1. The 1-year forward exchange rate (F) between US$ and AUS is AUS1.25/USS1. The annual interest rate in Australia and US are 5% and 10% respectively. According to Interest Rate Parity Theorem, is US$ relatively undervalued or overvalued with respect to AUS in the spot market, if the forward rate is correct? Select one a Undervalued O b. Overvalued O c. Fairly valued d. USS is mispriced relative to AUS, but it is not sure about the direction of mispricing. O e. Not able to infer whether USS is mispriced relative to AUS