You are a Canadian fund manager and are considering conducting a foreign investment in Australia. You would like to invest C$100,000 for one year in Australia in Australian Dollar (A$) and you will convert the A$ proceeds back to C$ at year end. There is currently an investment opportunity in Australia that generates an annual rate of return of 4.8%. The current spot exchange rate is C$1.065/A$. Suppose the expected inflation rates in Canada and Australia are 0.5% and 3.4% respectively. According to PPP, what will be the spot exchange rate of A$ at year end? ____[Blank #1]____ {Expressed in (:55 per A$; give your answer to third decimal point). Based on the spot exchange rate prediction calculated above, what will be your gross return in C$ if you conduct the investment in Australia? ___[Blank #2]___ (Give your answer to the nearest Canadian dollar). Answer for blank # 1: 1.035 (50 %) Answer for blank # 2: 101848 x (101861, 101859, 101860, 101862, 101863)