Is the US dollar selling at a premium or a discount

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Question

Using Spot and Forward Exchange Rates [L01] Suppose the spot exchange rate for the Canadian dollar is Can$1.09 and the six-month forward rate is Can$1.11.

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

Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.50?

Why might the beer actually sell at a different price in the United States?

Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar?

Which currency is expected to appreciate in value?

Which country do you think had a higher interest rates-the United States or Canada? Explain.

Reference no: EM132066282

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