Suppose the spot exchange rate for the Canadian dollar is C$1.09 and the six-month forward rate is C$1.12.Assuming absolute PPP holds,what is the current cost in the United States of a hamburger if the price in Canada of an equivalent burgerin Canada is C$4.75?
A) $5.39
B) $5.18
C) $4.36
D) $5.02
E) $4.51
Correct Answer:
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