Suppose the spot exchange rate for the U.S. dollar is CAD$1.01 and the six-month forward rate is CAD$1.03. a. Which is w

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Suppose the spot exchange rate for the U.S. dollar is CAD$1.01
and the six-month forward rate is CAD$1.03.
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$3.10? (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
Discount
Premium
d. Which currency is expected to
appreciate in value?
multiple choice 3
Canada dollar
U.S. dollar
e. Which country do you think has
higher interest rates—the United States or Canada?
multiple choice 4
U.S.
Canada