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uppose the spot exchange rate for the Canadian dollar is Can$1.14 and the six-month forward rate is Can$1.16. a. Which is worth more, a U.S.

uppose the spot exchange rate for the Canadian dollar is Can$1.14 and the six-month forward rate is Can$1.16.

a.

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

Canadian dollar
U.S. 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$2.95? (Round your answer to 3 decimal places, e.g., 32.161.)

Cost in U.S. dollars $

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